As growth improves and inflation rises, we are back to waiting for an eventual Federal Reserve interest rate hike, which may trigger market fears over policy mistakes and potential pressure growth.
SEE MORE: Gold Demand is Robust
For the precious metals market, traders will have to keep close tabs on the Fed as gold has been closely correlated to real interest rates. We have seen gold outperform in negative interest rate periods.
“We also think it is likely that the production ramp-up in Q2 has also been the result of producers preparing themselves for the summer wage negotiations with trade unions, which commenced in July. In an industry where labour costs make up for around half of overall operating costs, producers have probably decided to build their inventories in case of any disruptions emerging from the talks,” according to Capital Economics research posted by Mining.com.
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ETFS Physical Platinum Shares
