Gold: Rebound supported by lower energy – ING
ING strategist Ewa Manthey highlights that Gold has extended its recovery, posting its first monthly gain since February. The metal is supported by easing Middle East geopolitical tensions and sharply lower Oil prices, which reduce inflation concerns.
Gold has continued its climb, marking its first monthly increase since February. Strategist Ewa Manthey from ING attributes this resurgence to easing Middle East tensions and plummeting Oil prices, which in turn alleviate inflation worries. Nevertheless, lingering doubts about US monetary policy and the belief that interest rates will remain elevated for a longer period are seen as hindrances to substantial gains in gold prices.
The precious metal gained ground in July, propelled by a dip in oil prices. Diplomatic initiatives to alleviate shipping conditions through the Strait of Hormuz contributed to a significant drop in oil costs. As energy expenses decline, they have helped ease some inflation concerns, providing a more favorable environment for gold.
Despite the positive momentum, markets remain divided over the impact of improving Middle East dynamics and lingering concerns over US interest rates. Gold might face challenges in capitalizing on the improved macroeconomic backdrop if energy prices continue to fall. However, a further reduction in energy prices could bolster the bullish outlook for the metal, although the expectation of higher rates for an extended period may still keep gold prices from soaring.
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