In the report of WGC, it was stated that the monetary tightening processes of emerging central banks are nearing the end, and the common expectation in the markets is that the US economy will contract moderately towards the end of this year.
In this environment, we expect gold to continue to display a supportive outlook, with the effect of weaker dollar and bond yields, following the positive returns in the first half of the year.
In the council’s report, “Gold will face stronger investment demand if economic conditions deteriorate. On the contrary, a soft landing (in the economy) or a tighter monetary policy (under) may lead to a decrease in investments”.
The report said investors were concerned that a hard landing could still continue, given the historical gap between monetary policy and economic performance.