Weak exchange-traded funds (ETF) demand for Gold implies that institutional demand remains lacklustre, while Gold mine production and recycled supply are likely to grow over the near term. Considering also the impact of the mechanics of the futures markets, we believe that the path for Gold may be lower, but only modestly, over the near term.

Looking beyond the near-term movements, we believe that positive real rates should also keep downward pressure on Gold. Considering also the Fed’s prolonging of the tightening cycle, we expect Gold prices to likely stay largely on the defensive this year, but with support on the downside.