The rally in precious metals started after US inflation data came in lower than expected. Asian demand for Gold (XAU/USD) and Silver (XAG/USD) is increasing, notes Ryan McKay, senior commodity strategist at TDS.
Asian demand is expected to remain strong
“Lower-than-expected inflation data is aggravating the rally in precious metals after softer employment data had already reinforced expectations of a start to the Federal Reserve’s (Fed) tapering cycle in September. In this regard, it is increasingly likely that an important macroeconomic group that has been on the sidelines until now will regain interest in gold.”
“Indeed, the first evidence of renewed interest is starting to show as ETF positions continue to rise in July, after June saw the first monthly increase since May 2023. Furthermore, although Chinese gold reserves remained flat for the second consecutive month, major traders on the Shanghai Futures Exchange (SHFE) have again added to their net positions, highlighting that Asian demand is expected to remain strong.”
“Silver is also rising as Chinese interest has increased in recent weeks, with traders adding approximately +20K SHFE lots to their net position in July.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
