Gold price under pressure despite high risk aversion - Commerzbank

The Gold price was unable to escape the sell-off on the commodity and financial markets and also fell significantly, Commerzbank's commodity analyst Carsten Fritsch notes.

Gold struggles amid market turmoil

"This may sound strange, but it has happened several times in periods of heightened risk aversion, as market participants have to sell Gold positions to offset losses elsewhere, e.g. in equities. As such, the world's largest Gold ETF has recorded outflows of 9.4 tons in the last two trading days. This is probably one of the reasons why Gold has fallen by up to 5% since Friday."

"Yesterday, the price slipped well below the $3,000 per troy ounce mark at times. The significant rise in rate cut expectations in recent days - the Fed Funds Futures now imply that the Fed will cut rates by 100 basis points by the end of the year - suggests that the Gold price will soon rise again. The fact that the Chinese central bank PBoC announced that it had bought Gold for the fifth month in a row in March made headlines yesterday."

"However, the PBoC's Gold holdings rose by less than three tons month-on-month, meaning that purchases were even lower than in previous months. Apparently, the sharp price rise also curbed the PBoC's buying interest in March."