The gold price slipped this morning before reaching another two-month high.
Weak euro zone data and violence in Iraq continues to support it, however speculators are awaiting the U.S. and the West’s next steps in regard to the militant takeover of northern Iraq.
Last week’s climb in the gold price has boosted investor sentiment. This was shown in the SPDR Gold Trust, which saw inflows of 2.4 tonnes yesterday, taking total holdings to 785.02 tonnes.
In a similar vein of thought, Societe Generale has released a cross-asset report that says the gold price will continue to decline as the dollar strengthens and U.S. interest rates climb. The French bank believes sentiment in the West will continue to decline and money managers will continue off-loading those positions invested in ETFs.
The French bank also expresses concern for Chinese demand. Much of the recent rally has been attributed to short-covering rather than a correction in the gold price.
The bank also forecasts a fall in the gold price to $1,000/oz by end-2016. Much of the bank’s negative outlook is based on the belief that tapering will continue to the end of the year.
India pushing gold
In India, Bloomberg reported that gold retailers are pulling no punches when it comes to competing for customers’ attention during a lean season in the gold market. According to Bloomberg, raffle prizes of BMWs and bullion bars are up for grabs to customers who buy gold. Many of the competitions are available to those in both India and other Gulf countries.
Platinum continues to extend losses this morning as South African strikes appear to be coming to an end. Fears of a tightening in platinum supply shortage over the coming months have been eased as a result.
The deal between AMCU and the mining companies is yet to be agreed, however. Last time the mining companies signaled that a deal was about to be reached, the unions made demands that prolonged the deal.