SUMMARY
- Gold prices have traded sideways in recent days, driven by a “wait and see” approach among market participants.
- The risk of speculative profit-taking in Comex gold is elevated at this juncture.
- But central bank and ETF gold buying should remain buoyant in H2 2019.
- BAR: While weakness cannot be ruled out early in August, we think that BAR will post a monthly gain in August – our target is at $14.55 per share.
Central bank trends
Central banks’ sentiment toward gold remained positive at the start of Q3
The CRB bought 16.9 tonnes of gold in June (according to the gold reserves holdings reported by the IMF), pushing Russian official gold holdings to 2,207 tonnes.
In H1 2019, global central banks bought a combined 381 tonnes of gold, which is much higher than the net purchases of 180 tonnes made in the same period of last year, according to data from the World Gold Council (WGC).
According to a survey conducted by the WGC, 11% of major developed and EM economies are inclined to raise their gold holdings over the next 12 months.
This suggests that central bank gold buying should remain buoyant in H2 2019.
Reference: SeekingAlpha
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