Weekly Gold Review: COMEX Futures Fall Near $1700 Mark

10 Sep 2022 , 12:32 PM

COMEX Gold fell near $1700 per ounce mark amid sustained selling pressure and worries over ETF demand. MCX Gold also approached the Rs 50000 per 10 grams mark. Global gold ETFs registered outflows of 51t (US$2.9bn, 1.4%) in August, in line with price performance. This was the fourth consecutive month of outflows. Funds have now given back two-thirds of the inflows accumulated through April; y-t-d global inflows are 102t (US$7.5bn), with total holdings at 3,651t (US$202bn), up 3.6% on the year. A fresh two-decade high in the US dollar – coupled with higher rates – was again, a headwind for the gold price. Gold failed to break through the US$1,800/oz resistance level before succumbing to the pressure following stern hawkish warnings from the Fed. Gold finished the month down 2% to US$1,716/oz, and is lower by 5% on the year. Outflows were widespread in August. North American funds led outflows, falling 40t (US$2.2bn, 2.1%), driven by the largest and most liquid US funds. Continued hawkish commentary from US Fed officials drove 2-yr rates above the June highs, to levels last seen during the Global Financial Crisis (GFC). Nearly all funds in the region experienced outflows, including those in the low-cost space. European funds had modest outflows of 4.7t (US$266mn, 0.3%), led by UK- and Swiss-based funds. Europe had considerable equity weakness during the month, and the euro broke parity versus the dollar for the first time since 2002. Volatility in Asian gold ETF flows continued as holdings fell (7.5t, -US$433mn, 6.0%) after rebounding the previous month. Chinese funds dominated outflows in August and remains the country with the most outflows this year. Indian gold ETFs witnessed minor net outflows during the month (0.1t), as investors rotated into other asset classes like equities (BSE Sensex, +3.6%) and bonds (Indian 10-year government bonds, +1.2%).Powered by Commodity Insights