Gold rebounded toward $4,450 per ounce, driven by growing uncertainty around the US policy mix. The precious metal moved closely with EUR/USD as investors reassessed monetary policy, fiscal sustainability and exchange-rate management.
Key Events
The US PCE report on August 26, the Jackson Hole gathering from August 27-29, and the September 16 FOMC meeting are the next key events. A dovish tilt would be bullish for gold. Gold prices have averaged $4,360 per ounce year-to-date on a 7.3% year-over-year increase in investment demand. Central bank purchases already provide a supportive backdrop, rising to 51 tons in June, well above the 12-month average of 27 tons.
Market Trends
China's gold imports have posted a series of all-time highs year-to-date. China views gold as a strategic tool to support the internationalization of the yuan. The World Gold Council's Gold247 initiative aims to make bullion easier to transfer, trace and use as collateral while maintaining a direct link to physical metal.