WGC Anticipates Unseasonal Gold Market in August This Year

SEATTLE (Scrap Monster): The Gold Market Commentary for July 2023 published by the World Gold Council (WGC) noted that August has been a seasonally good month for gold returns over the past several years. However, it expects an unseasonal gold market in August this year.

The review of the gold market indicates that the yellow metal gained 3.1% in July 2023, thus delivering a year-to-date return of 8.7%. The global gold ETF holdings diminished for the fourth consecutive month, registering outflows of 32 tonnes, mainly driven by European and North American funds. But the COMEX managed money net long futures positions rose by 93 tonnes.

The WGC report does not guarantee a strong August this year. This is due to several reasons. Firstly, high local gold prices and soft economic environment in two key markets- India and China suggests a lower demand for physical gold purchases during the month. Also, the equity markets that have managed to weather weakening fundamentals may perform well in H2, driven by strong Q2 earnings season. This may result in weak demand for hedges such as gold.

Beyond August, the support for gold is likely to be established later in the year.