Physical demand for Gold remains subdued - Commerzbank

The Gold price is scratching last week's all-time high and could still climb a little higher. But the upward momentum seems to be gone for now, Commerzbank's FX Analyst Barbara Lambrecht notes.

Upward momentum seems to be gone

"After all, some expectations of interest rate cuts have been priced in. At first glance, the impact of the high price level on physical demand for Gold in China, the largest sales market, appears to have eased somewhat: Gold imports from Hong Kong climbed by 6% compared to the previous month. In net terms, i.e. excluding exports, the increase was as much as 17%."

"In absolute terms, however, the level remained low compared to the average purchases in the first three months at a good 31 tons or 26 tons net, which was certainly also due to the fact that the Chinese central bank has not made any more purchases since May."

"The buying interest of ETF investors is also recovering, albeit somewhat hesitantly: after all, holdings are now almost 3% higher than the multi-year low in mid-May and thus as high as they were last in mid-February."