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Gold prices hit new highs recently — who’s in the driving seat?

Gold prices at record high: Investors are staying on the sidelines as evidenced by the stagnant holdings of physically-backed products. Historically, these holdings have moved in line with gold prices, showing the appetite of investors.

January 22, 2023 / 05:47 PM IST
Typically, silver tends to outperform gold in times of a weakening Dollar and falling US bond yields.

Typically, silver tends to outperform gold in times of a weakening Dollar and falling US bond yields.

Carsten Menke, Head, Next Generation Research at Julius Baer

Gold prices have reached new multi-month highs recently, but we struggle to see who is in the driving seat of these moves. Investors are still on the sidelines of the gold market, and in fact have even become sellers.

Meanwhile, Asian demand does not show signs of strength, and Dollar and US bond yields seem to be playing less of a role of late after lifting the markets during the past few weeks. All in all, we reiterate our view that prices are on a somewhat soft footing and that we would not chase this rally.

The gold market is becoming more and more puzzling. While prices have reached new multi-month highs recently, trading at around $1,930 per ounce, we struggle to see who is in the driving seat of these moves.