WGC Q3 Market Commentary

(July 23, 2015 - by WGC World Gold Council)

On Monday 20th July the gold price fell sharply, dropping 4.3% from its Friday closing price. This note explains what happened and counters some misconceptions.

The majority of commentators explain gold’s recent price fall in the context of four themes:

• The continued recovery in the US economy, the associated strengthening dollar, and an expected rise in interest rates. This, they believe, represents major headwinds for gold.
• A slowdown in China’s gold demand.
• The recent broad commodity sell-off, which is itself a result of US dollar strength and concerns over China’s economic growth.
• And in the background, political tensions have eased, as illustrated by the tentative resolution of a Greek bailout.

These factors are significant. The spectre of the much anticipated US rate rise has hung over the gold price for some time. And a slowdown in China, the world’s largest gold consumer, is clearly an issue many investors will be giving thought to. But this is a partial view. Crucially, it misses some key drivers of the gold market that are relevant to investors.

Read the full WGC Market Commentary report at:
www.mintstategold.com/articles/WGC_072315_Market_Commentary.pdf