Gold is still locked in a narrow trading range and remains near the strong level of $1800 per ounce.
In general, the prices of precious metals have not recently shown significant volatility and are moving within wide ranges of consolidation. The still high level of inflation and the elements of uncertainty associated with the pandemic are deterring investors from selling protective assets. Consolidation is likely to continue in the near future, and the scope of fluctuations of 2-3% will limit the range of the price corridor.
The ECB and the Bank of China have already confirmed their commitment to a soft monetary policy last week. The focus has now shifted to the Fed meeting. Market participants do not expect changes, but will look for hints on possible options for curtailing incentive programs and the timing of interest rate increases. Despite the talk about the need to tighten policy, in the most likely scenario, a rate increase is not expected before 2023. According to Bank of America, the outflow of investments from gold for six weeks amounted to almost a billion dollars. At the same time, prices for another segment of protective assets – US Treasury bonds – were growing. At the same time, according to preliminary data from the International Monetary Fund, central banks actively continued to buy gold in June and purchased more than 50 tons of the precious metal.
In our forecast, we expect the gold price to rise to the levels of 1805, 1810 and 1820 dollars per troy ounce.