Potentially weighing on gold in the near-term are a couple of factors in addition to profit taking. First, an interest rate hike also weighs on gold prices since the precious metal pays its investors nothing and struggles to compete with yield-bearing assets when rates rise. However, there appears to be little momentum for a Fed rate hike anytime soon.
Second, concerns over economic instability in a post-Brexit world have subsided, further pressuring the precious metals market. The shift away from safe-havens toward riskier assets has diminished the attractiveness of bullion.
Related: Safety ETF Plays Rally on Brexit Concerns
“Not only is investor demand expected to remain strong, but Gold said that demand in India and China should pick up in the second half of the year as well. These two important markets in precious metals have been fairly lackluster in the early part of the year,” according to Kitco News.
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