Gold Prices Rise $3,500 in Sight?
Gold appears well-positioned to post weekly gains as three events are likely to bolster the precious metal's appeal. Any move higher would support the narrative that bullion still has the potential to reach its peak set in April.
In Asia, the People's Bank of China (PBOC) will report foreign exchange data on Thursday, possibly confirming a further expansion in its bullion holdings. This figure has risen every month since the PBOC's current upward trend began in November last year, reflecting global central banks' appetite for gold.
In Washington, President Donald Trump said he plans to announce a new Federal Reserve chairman, giving him the opportunity to appoint someone more in line with his preference for lower interest rates. This process—plus further attacks on Fed Chairman Jerome Powell—could further weaken the US dollar, which was also hit hard by Friday's weak employment data.
Third, in this generally favorable environment, bullion-backed exchange-traded funds (ETFs) could attract new inflows. Asset holdings have risen every month this year except one, and currently sit just below a two-year high set on July 25.
Source: Bloomberg
