Gold to remain range-bound in the short- term as rate hike expectations persist

Gold Price Outlook and Macroeconomic Drivers
- Gold is expected to remain range-bound in the short term and consolidate over the summer (p. 1, p. 5).
  - Expectations of at least one Fed rate hike before end-2026 persist, supported by a hawkish June FOMC meeting and a resilient US labor market (p. 1).
  - Gold fell below $4,000 for the first time since November, hitting a one-week low of around $4,040 after President Trump declared the interim peace deal with Iran was "over" (p. 1).
  - Inflation concerns remain elevated due to delayed normalization of tanker traffic in the Strait of Hormuz, high energy prices, and the AI boom's demand for energy and infrastructure (p. 1).
  - A price rally is expected to resume later in Q3 as expectations of policy tightening scale back and the Fed likely keeps rates unchanged for the rest of 2026 (p. 5).
Physical Gold Demand and Central Bank Activity
- Physical gold demand has slowed recently due to a summer lull and cooling retail investment (p. 3).
  - High oil prices have eroded disposable incomes, and elevated gold prices have pressured jewellery demand (p. 3).
  - China and India showed tentative signs of demand improvement after the June price correction, though gains remain modest ahead of their seasonally strong periods starting in August or September (p. 3).
- Central bank purchases have improved following a decline toward the end of Q1 (p. 3).
  - Temporary official sector sales during the early Iran-Israel conflict have subsided, leaving Russia as the only notable persistent seller (p. 3).
  - Regular official-sector buyers continue to add to holdings due to lower prices, US policy uncertainty, and geopolitical risks (p. 3, p. 5).
Other Precious Metals and Industry Developments
- Silver, platinum, and palladium experienced distinct market developments (p. 1).
  - Global semiconductor sales, which impact silver, jumped 104% year-over-year to $120 billion in May (p. 1).
  - Chinese domestic vehicle sales fell 23% year-over-year to 1.6 million units in June, affecting platinum (p. 1).
  - Toyota Motor announced a $3.6 billion investment to add a second assembly line for Tacoma production at its San Antonio plant, creating 2,000 jobs (p. 1).

Gold Price Outlook and Macroeconomic Drivers
- Gold is expected to remain range-bound in the short term and consolidate over the summer (p. 1, p. 5).
  - Expectations of at least one Fed rate hike before end-2026 persist, supported by a hawkish June FOMC meeting and a resilient US labor market (p. 1).
  - Gold fell below $4,000 for the first time since November, hitting a one-week low of around $4,040 after President Trump declared the interim peace deal with Iran was "over" (p. 1).
  - Inflation concerns remain elevated due to delayed normalization of tanker traffic in the Strait of Hormuz, high energy prices, and the AI boom's demand for energy and infrastructure (p. 1).
  - A price rally is expected to resume later in Q3 as expectations of policy tightening scale back and the Fed likely keeps rates unchanged for the rest of 2026 (p. 5).
Physical Gold Demand and Central Bank Activity
- Physical gold demand has slowed recently due to a summer lull and cooling retail investment (p. 3).
  - High oil prices have eroded disposable incomes, and elevated gold prices have pressured jewellery demand (p. 3).
  - China and India showed tentative signs of demand improvement after the June price correction, though gains remain modest ahead of their seasonally strong periods starting in August or September (p. 3).
- Central bank purchases have improved following a decline toward the end of Q1 (p. 3).
  - Temporary official sector sales during the early Iran-Israel conflict have subsided, leaving Russia as the only notable persistent seller (p. 3).
  - Regular official-sector buyers continue to add to holdings due to lower prices, US policy uncertainty, and geopolitical risks (p. 3, p. 5).
Other Precious Metals and Industry Developments
- Silver, platinum, and palladium experienced distinct market developments (p. 1).
  - Global semiconductor sales, which impact silver, jumped 104% year-over-year to $120 billion in May (p. 1).
  - Chinese domestic vehicle sales fell 23% year-over-year to 1.6 million units in June, affecting platinum (p. 1).
  - Toyota Motor announced a $3.6 billion investment to add a second assembly line for Tacoma production at its San Antonio plant, creating 2,000 jobs (p. 1).

Gold to remain range-bound in the short- term as rate hike expectations persist

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Gold to remain range-bound in the short- term as rate hike expectations persist

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