WGC:Gold Faced Major Headwinds In September

Going forward, the hawkish stance by some central banks is likely to create challenges for gold, it said.

SEATTLE (Scrap Monster): The latest ‘Gold Market Commentary’ published by the World Gold Council (WGC) noted that gold faced headwinds throughout the month of September this year. The prices of the yellow metal fell by 4% during the month, mainly led by higher U.S. yields. Going forward, the hawkish stance by some central banks is likely to create challenges for gold, it said.

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The prices of gold registered decline for the second month in a row. The monthly gold price performance was unable to keep the initial momentum it received as a result of U.S. employment data, cooler August CPI data and the Evergrande situation. As the month progressed, the sentiment towards gold weakened further. The global gold ETFs too recorded another month of outflows in September. Year-to-date, the gold prices have declined by nearly 8%.

The future of gold will be challenged by shifting policy environment. The anticipated interest rate hikes by the U.S. Fed towards the end of the current year will be a major headwind. On the other hand, the accommodative approach by the European Central Bank and the Bank of Japan should benefit gold in those regions. Overall, gold’s performance is likely to remain choppy in the near future, WGC noted.

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