What’s behind gold’s March rally?

Juan Carlos Artigas, Global Head of Research-WGC explains those factors, behind gold’s March rally! He said at World Gold Council (WGC) that, Gold has reached continuous highs in March and is trading close to US$2,200/oz! Gold’s price increase of 6.5% m-t-d1 can, in part, be explained by a weaker USD, as well as higher risk and momentum…but other factors such as technicals and over-the-counter (OTC) activity likely accelerated the move!

Looking forward, a sustained rally could trigger further investment flows but gold remains sensitive towards bond yield volatility in the short term. A market searching for the trigger! The gold price has shot up since the end of February, with the LBMA Gold Price PM trading at US$2,180.45/oz as of 11 March – a 6.5% increase m-t-d. Gold has reached consecutive record highs six days in a row and flirted with US$2,200/oz last Friday (8 March) in intra-day trading.

Gold’s sharp increase has since caught the attention of market participants. The initial trigger was linked to a weak ISM print in the US on 1 March, 2 pushing bond yields and the US dollar down.

But that can only explain so much, so what’s behind gold’s move since? Our analysis, using a weekly version of our Gold Return Attribution Model (GRAM), indicates that gold’s performance can partly be explained by a few factors.

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