Gold Monthly Report – July 2024: Market Analysis and Outlook

US Economic Conditions

Economic conditions in the US are starting to soften. This trend raises expectations of monetary easing later this year and into 2025. A weakening economy may impact the demand for gold, traditionally seen as a safe haven during times of economic uncertainty.

Gold Market Dynamics

In July 2024, there has been a tentative return to gold-backed ETF buying, although futures positions remained steady. However, demand for OTC options has softened. This trend may indicate growing investor interest in gold, although market uncertainty persists.

Central Bank Demand

According to the World Gold Council's 2024 Survey, central banks continue to show significant interest in gold. They anticipate that the share of reserves held in US dollars will decline, while the share held in gold will rise. The primary reasons are gold's minimal default or political risk and its adequate trading liquidity.

Production and Pricing

Gold production increased to 3,646.1 tons (+0.3% YoY) in 2023, with China retaining the top spot among producers. Gold prices saw a modest 0.3% month-over-month gain, trading within a broad range of USD 2,275-2,450 per ounce over the past month. Stable prices suggest a relatively calm market, although economic changes could influence future pricing trends.

Other Precious Metals

Silver and platinum weakened slightly, while palladium experienced a significant rise of 11.1% month-over-month. These varied trends among precious metals may reflect shifting investor preferences and different factors affecting individual markets.

Economic Indicators

Economic indicators suggest potential upside risk to the US Federal Reserve's unemployment projections, with the labor market showing signs of softening. This could influence future Federal Reserve decisions and broader economic conditions, impacting gold demand.

Summary

The Gold Monthly Report for July 2024 presents a mixed outlook for the precious metals market. Gold shows modest price gains and strong central bank support amidst softening US economic conditions. Investors should closely monitor economic developments and changing trends in the precious metals market to adjust their investment strategies accordingly.