“It’s interesting how investors around the world have reacted to some of the risks stalking financial markets. Weaker economic prospects and tumbling currencies off the back of heightened tensions with the US boosted Chinese and Iranian gold demand, while US investors shrugged off any geopolitical concerns,” said Alistair Hewitt, Head of Market Intelligence at the World Gold Council. “Demand from tech companies continued to grow, with H1 demand reaching a three-year high, while economic growth boosted jewelry demand in the US with Q2 demand hitting a ten-year high.”
Meanwhile, gold-focused ETFs have slid the past month–SPDR Long Dollar Gold Trust (NYSEArca: GLDW) lost 2.3%, SPDR Gold Shares (NYSEArca: GLD) is down 2.2% and SPDR Gold MiniShares Trust (NYSEArca: GLDM) is in the red 2.3%.
The chances of rising interest rates increased as the Department of Commerce reported last week that the gross domestic product grew by 4.1% in the second quarter. However, that could be tempered by the recent slowdown in housing, which accounts for 15-18% of GDP–with real estate being a strong barometer for shifting economic policy, it could give the Fed pause on raising rates, which could help boost gold ETFs.
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