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0801 2024


Market Sentiment and Monetary Policy Expectations Weigh on Gold

Bas Kooijman

Gold's short-term downtrend persisted with the market extending its losses since the beginning of the year. While the market has been climbing for the last few months after hitting a multi-month low in October, it could come under some pressure over the short term.

Gold prices could continue to see risks as the overly optimistic expectations of interest rate cuts in the US continue to dampen while a slightly stronger dollar and rebounding treasury yields diminish the commodity’s attractiveness. Strong job market data last week have added to the pressure on gold and market participants could now turn to this week's Inflation data, which could influence sentiment and gold’s performance.

At the same time, economic uncertainties and geopolitical developments in Europe and the Middle East could remain a source of risks for the financial markets in general and could bolster the demand for safe-haven assets like gold. In addition, central banks' gold purchases could help maintain momentum in demand, which could help support the gold market over the longer term.

Bas Kooijman

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