Investors remained wary of the movement of gold during the second half year 2025.
Next week the World Gold Council will release its report on gold demand trends for the second quarter, and there are expectations that price increases will be significantly slowed down.
Gold prices increased by less than 6% during Q2. This is a significant decrease from the previous period.
The slowdown is largely due to the loss of investment demand momentum, which was a major driver during Q1.
Loss in investment demand
Barbara Lambrecht is a commodity analyst with Commerzbank AG.
The ETF flows suggest this at least.
The exchange-traded fund (ETF) inflows were 170 tonnes, which is a significant 50-ton drop compared with the first quarter.
The demand for a variety of products has increased in Asia. However, the US and Europe have seen a decline in this area.
Lambrecht went on to elaborate further about the investment demand composition, saying, “Although the demand for bars and coins is included in investment and was higher than ETFs demand in the 1st quarter, momentum is much lower here, which means that the decline in ETFs demand will likely be cushioned, but not offset.”
This report also highlights the fact that central banks have been buying gold in large quantities, but only partially reporting them to IMF. These figures are usually higher than those reported by official sources.
The fundamental trends of investment demand suggest that gold could reach a peak in short-term.
The expectation of no rate cuts in the US at the FOMC meeting on Wednesday reinforces this sentiment.
Weekly gold gains are lost
The gold price has dropped dramatically over the last two days. This erases the gains made earlier in the weeks.
The gold price this morning is just below $3350 per troy-ounce. Gold is facing headwinds due to the easing of trade tensions.
A similar trade agreement could be modeled on the recent agreement reached between the US, Japan and the EU.
Carsten Fritsch said that the resulting optimism resulted in an increased risk appetite on financial markets. This was evident in the rising stock market, according to a report by Carsten.
Gold is not as popular in such an atmosphere.
Bloomberg tracked 20 tons inflows into gold ETFs during the first trading days. This was mainly early in the week as the price of gold rose dramatically.
Silver and Platinum Price Revisions
The German bank, Commerzbank, has raised its gold, silver, palladium, and platinum price predictions.
Commerzbank had predicted that the price of silver would reach $37 per ounce at the end of 2018.
Platinum is expected to reach $1350 per ounce, up from $1250 earlier.
The price of palladium has also increased by $100 per ounce, to $1200.
Fritsch stated that the price increases for gold, silver and platinum are sustainable because they have reduced the undervaluation of these precious metals.
The gold/silver price ratio, at 86 is just slightly above the historical average. It is also true of the ratio between platinum and gold.
Fritsch added:
Silver and platinum are expected to follow the gold price in coming years.
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