WGC: Gold Prices Dragged Down by Strong Dollar, High Yields

SEATTLE (Scrap Monster): The Gold Market Commentary for August published by the World Gold Council (WGC) notes that higher yields and stronger dollar continued to pull down gold prices. The prices of the yellow metal dropped by nearly 2% during the month, it said.

According to WGC, gold prices ended the month at $1,715.9 per ounce, registering its fifth straight month of decline. In U.S. dollar terms, gold has recorded 5% decline year-to-date. Meantime, it continued to remain as one of the top performing assets so far this year. Also, the global gold ETF outflows totalled 51 tonnes amounting to $2.9 billion, lower when compared with the prior month.

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Looking ahead, gold is likely to remain under pressure if the central banks continue to like rates aggressively. However, the risk of stagflation or outright recession could offset this, as gold has historically performed better in such environments. The trading volumes and consumer demand for gold is expected to see near-term improvement in September, WGC report said.

The gold ETFs registered net outflows of 51 tonnes in August, registering the fourth consecutive month of net outflows.