Rhona O'Connell, chief market analyst at StoneX Bullion, said India's tax cuts on gold and silver and China's increased physical demand would boost gold prices.
O'Connell noted that gold prices have been volatile due to US economic data last week, especially amid heightened expectations for a September rate cut.
“In the physical gold market, there are clear signs of a revival in demand for the precious metal. First, the Indian government reduced import duty on gold and silver from 15% to 6% in the middle of last week. This initially led to some selling. However, the selling was short-lived.”
Besides, gold ETF cash flow also remained positive, recording 16 tons of net cash flow in just 4 days last week.
Not only India and China, Western investment demand is gradually reappearing in the gold market as the US Federal Reserve (FED) prepares to loosen interest rates (as early as September).
In a recent interview with Kitco News, Ryan McIntyre, managing partner at Sprott Inc., said that the gold market could see a significant rally as demand from exchange-traded funds begins to pick up.
McIntyre's comments come as gold prices face resistance at $2,400 an ounce, just weeks after hitting an all-time high of $2,480 an ounce.
McIntyre said that while the upcoming Fed rate cut makes gold attractive, there is no real incentive for investors to enter the market right now.
“The environment for gold is improving, but I don’t think there’s a strong institutional buy signal. That won’t happen until there’s more risk aversion in the market,” he said.
It will take “a significant shift” for investors to change their thinking about how they build their portfolios, he added. McIntyre said he expects sentiment to change significantly as the slowing economy begins to impact the stock market.
The only factor that continues to support the US dollar as the world's reserve currency is that there are no other alternatives, he added.
Source: https://laodong.vn/tien-te-dau-tu/nhu-cau-tang-thuc-day-gia-vang-but-pha-1373853.ldo
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