The gold price has defied gloomy sentiment and an impending rate rise in the US to record gains during the first weeks of August, but it remains trapped in "narrow ranges" and susceptible to a renewed slide. Having dipped as low as $1,080 in July after the largest monthly fall in two years, gold has rallied of late as a sharp currency devaluation in China has prompted a rush to perceived 'safe havens'. But "the price rebound has been moderate": the precious metal is still 40 per cent down from its 2011 peak and Financial Express notes it remains "trapped in narrow ranges". The Wall Street Journal reports that spot gold rose marginally to $1,118 an ounce in Asia trading, where it remains on Tuesday morning in London. Emphasising the negative perception of prospects which had set in, the Financial Times says data compiled from regulatory filings show institutional investor funds withdrew around $2.3bn (£1.5bn) from major gold index tracking funds in July. Nitesh Shah, an analyst at ETF Securities, the firm that pioneered low-cost gold tracker funds, said the bearish sentiment is still prevailing and that outflows have been recorded even "in the past few weeks". Critical to the near-term trend will be the Federal Reserve's decision on interest rates, which many still expect to be increased in September. Others say they could remain on hold until December or even into next year. A move on rates would reduce the appetite for non-yielding commodities such as gold and would probably trump any continuing benefit from the China ripple effect. The FT notes, however, that some more speculative investors are betting the re-emergence of gold as a currency hedge will bring about a more marked increase that will see it break its current shackles. For example Stanley Druckenmiller, a legendary hedge fund manager who previously worked for George Soros, bought $324m (£206m) worth of shares in one major gold trust at the end of June. Gold price: demand falls to six-year low 13 August Demand for gold fell to its lowest level for six years in the three months to June – the result of declining orders from jewellers in dominant markets, as well as from global central banks. Figures from the World Gold Council reveal global demand fell by 12 per cent to 915 tonnes in the second quarter, the Daily Telegraph reports. Half of this fall was accounted for by sharp declines in jewellery demand in India and China, while central bank purchases fell 13 per cent, the Financial Times adds. Gold prices have been in broad decline since hitting a peak in 2011 and fell at the fastest monthly rate for two years in July. They have, however, rallied strongly and enjoyed five consistent sessions of positive closes so far in August. This has been driven most recently by three days of sharp currency devaluation in China that has rattled global markets and prompted investors to flee to traditional safe havens. Having hit a three-way intra-day high quoted by the Wall Street Journal at $1,026 an ounce on Thursday, spot gold has slipped back slightly to $1,018. CNBC's respected analyst Daryl Guppy has said technical analysis suggests gold is struggling to find support at key thresholds and is likely to continue a longer term decline, perhaps taking it below $1,000 an ounce. On the other hand, a prolonged currency 'war' could re-establish its credentials as a currency hedge and hold prices higher. The short-term upward trend is being helped by speculation that a US rate rise is likely to happen somewhat later than previous expectations of September – downward pressure will return when an increase comes into sharper focus. Devaluation in China will also have the effect of increasing import prices, which could weigh further on demand. Gold price: 'classic risk-off' trade spurs gains 12 August Investors around the world have been caught off guard by China's move to undertake a substantial devaluation of the yuan. The decision is reverberating around markets and causing commodities in particular to fall sharply. All, that is, except gold. SEE RELATED Plunging oil price pushes producers to the brink Despite a surge in the US dollar, against which the yuan is fixed and which usually moves in inverse correlation to the precious metal, gold has recorded four positive sessions in a row. It is up again on Wednesday as it heads for its longest winning streak in three months, according to the Financial Times. Having closed marginally above $1,110, it hit $1,117 in morning trading before falling back slightly. The devaluation in China, one of the world's largest markets for most commodities, makes imports more expensive. After the fastest one-day fall ever of 1.9 per cent on Tuesday, the Chinese central bank announced a further 1.6 per cent drop on Wednesday alongside new guidelines for setting the rate which take into account wider market forces. This is being seen by some as a sign of its intention to get the renminbi listed as a reserve currency with the IMF and could act to keep the currency low at a time when China's economic growth and export market are slowing. This has weighed on wider commodities and especially the likes of Brent crude oil and copper. Gold has bucked the wider trend because of its status as a quasi-currency and safe haven, with a fall in bond yields as investors flock to sovereign debt helping to boost its attraction. But can it last? China is also the third largest market in the world for gold so the currency drop could hit demand here too – in fact, the Wall Street Journal notes, the metal did initially fall on the news. There is also a looming rate rise in the US which will act as a significant drag. Daryl Guppy, the analyst famed for inventing the 'Guppy Multiple Moving Average', an indicator which measure short-term and long-term trends on given markets to predict bull and bear markets, writes for CNBC that gold has consistently failed to find "support" at the higher end of its shorter-term averages and remains on a longer-term downward trajectory. He said the numbers currently imply the market is likely to find lower daily "resistance" levels until it reaches a "horizontal support level near $980". Gold price rallies - but can it hold gains? 11 August Gold is recovering somewhat from a major slump last month, closing above $1,100 for the first time since mid-July on Monday and trading in modestly positive territory again on Tuesday despite renewed pressure on commodities amid a dollar surge. The positive close to start the week marked the third consecutive session of increases and comes after the worst single month since September 2013, in what has been a protracted fall from a peak in 2011 of well above $1,900. According to Reuters, the rebound followed fresh uncertainty over a September rise in interest rates in the wake of comments from Federal Reserve vice chairman Stanley Fischer and Atlanta Federal Reserve President Dennis Lockhart. Fisher had said a global deflationary trend "bothers" the Fed but is only "one of many factors it is watching", while Lockhart chose not to repeat previous statements that he would vote to raise rates next month. A sense that rates will be hiked imminently has added to downward pressure on commodities and especially gold, which have suffered during a strong period for the dollar. Non-yielding assets will lose favour when yields elsewhere finally begin to grow after nine years of loose monetary policy. The respite for gold may be brief, however, as whether or not it happens in September the Fed has given strong indications its rate decisions are increasingly balanced and most believe it is likely to make a move before the end of the year. Then there is China. One of the main reasons for gold's fall was the fact Beijing was not buying as much of the metal to underpin its currency as had been expected, while consumer demand makes the country the third-largest buyer of the metal worldwide. A shock downward revision by China to the renminbi's daily fix to the dollar today will make gold more expensive in China and could weaken demand further, says Market Watch. Gold price: why Aussie miners don't mind the slump 4 August Gold bugs have been watching with growing concern as prices have plummeted to multi-year lows in recent weeks. Or at least, most of them have. While UK investors holding gold funds might not be enjoying the latest slump in the precious metal, Australian miners are being cushioned by a weak Aussie dollar which is actually pushing the price per ounce above long-run averages. In addition, the decline in sentiment created by the global commodities rout is creating buying opportunities. Ian Murray, executive chairman at Australian explorer Gold Road Resources, told CNBC that the average cost per ounce of gold has been A$1,435 over the past five years, but that prices are now running at A$1,500. "US gold prices have declined, but we've had the Australian dollar also decline and that's more than offset the US price decline." The Aussie dollar is down 11 per cent year to date, while its American counterpart has risen around eight per cent. Spot gold prices are down around eight per cent over the year and, according to Reuters, saw the sharpest monthly fall since September 2013 in July which bottomed out at $1,088. After a brief rally at the end of last week the metal fell back again during Monday's first trading session of August and the price remains around $1,090. Reuters adds that the currently bearish outlook is also helping domestic mining companies in Australia, creating buying opportunities at attractive valuations. Overseas owners who at their peak controlled 70 per cent of the country's mines are now willing to sell at discounts of up to 60 or 70 per cent, claims Jake Klein of Evolution Mining, which has spent close to A$800 million ($584.40 million) buying mines this year. But the good times may not last. The Sydney Morning Herald notes the Aussie dollar was the third-worst performing currency over the year so far and shed 5.2 per cent in July alone, but that improving domestic demand has seen it among the top three risers this week. At the same time a Bloomberg poll predicts gold has further to fall and could hit $984 an ounce before rebounding. Gold price: Fed rates hint halts recovery 30 July Gold has fallen back again after a brief recovery earlier this week which ended its worst losing streak in 20 years, after the Federal Reserve hinted at a rate rise in the near future pushed the dollar towards fresh multi-year highs. Federal Reserve rate-setters voted as expected yesterday to keep rates on hold, but a shift in language in its statement fuelled speculation that its increasingly hawkish stance will lead to a hike at its next meeting in September. Despite ostensibly maintaining an equivocal position, the suggestion that risks to the economy are "nearly balanced" spurred markets and pushed the dollar up towards the high watermark reached earlier this year. The Financial Times notes the dollar index, which measures the currency against a weighted basket of its peers, rose by around 0.5 per cent to a day high of 97.46, just three per cent off it's 12-year high in March. Gold is quoted in dollars and a positive move in the greenback tends to put downward pressure on prices as it reduces buying power. Spot gold was trading down around 0.6 per cent at $1,085, approaching again the five-year low it reached on Friday. It has now been hovering around or below the symbolic $1,100 threshold for more than a week. A number of analysts have repeatedly asserted that the fundamentals could pin gold down for some time to come, with an actual rate rise potentially pushing it down below $1,000. Two famously bearish analysts who predicted a long-term depreciation in 2012 told Market Watch the price could even dip eventually to $350. Most would consider this far-fetched, but few dispute that pressures will persist in the short term. Australia's second biggest gold producer, Newmont Mining, told The Australian it was prepared for gold to dip further and that it expected the metal "to bounce all over the place" in the short to medium term. Gold price: too early to call market bottom 28 July A losing streak for gold unparalleled in 20 years came to an end on Monday, as gold prices rose slightly amid a squeeze on the dollar and concern over the latest market crunch in China. The Wall Street Journal reports that gold rose around one per cent to $1,096.40 on the New York Mercantile Exchange, up from the five-year low of $1,085.50 reached on Friday. As shares in Shanghai tanked as much as 8.5 per cent gold briefly regained its allure as a safe haven, boosted by an easing of the dollar which had been powering ahead in recent weeks. But it is too early to call the bottom of the market. Ira Epstein, a broker with the Linn Group in Chicago, told the Journal that given the scale of the recent price plunge and the drama yesterday, the increase was meagre. In early trading on Tuesday it remains below the symbolic $1,100 threshold and there are plenty who believe key fundamentals present a case for further weakening in the coming days and weeks. Peter Ward, of London Capital Group, told the Daily Telegraph sentiment towards gold remained mixed after last week's losses, and said that a key test was going to be a Federal Reserve meeting on Wednesday, which is being watched for signs of an imminent rate increase. He said "any hawkish sign" could push prices down towards $1,000, "the critical psychological target". Thomas Price, an analyst at Morgan Stanley, told Bloomberg the price could yet slide as low as $800. Others suggest that while the market may not yet have bottomed, a turning point could be just around the corner. Clive Hale of Albemarle Street Partners told City AM that money printing by central banks will eventually weigh on key currencies and push investors back into gold, with a price of $1,000 cited as a potential "inflection point". Video: Canadians take a punt on Irish gold Gold price slump: how low can it go? 24 July Gold has had a tough few days. A combination of a strong US dollar, looming interest rate rises on both sides of the Atlantic and an improvement in global economic fortunes prompted a 'flash crash' in the gold price at the start of the week, and as it ends there is no sign of an imminent recovery. The Financial Times notes that, having declined by a further one per cent to $1,084 in Friday trading, the precious metal is now at its lowest level since February 2010. CNN adds that gold had declined for ten straight sessions in the US, a losing streak unparalleled since 1996. "To put that in perspective", it says, "back then oil prices were fetching just $19 a barrel". Without a major recovery today it will have racked up five consecutive weeks of losses, according to Bloomberg data. Investors are apparently piling out of gold funds, but is the current slump a buying opportunity or will prices continue to slide? Citibank analyst David Wilson told Business Insider he believes that the gold price will remain under pressure in advance of the Federal Reserve's September policy meeting, at which it is now widely expected to raise the interest rate from its lowly 0.25 per cent. Climbing rates tend to reduce the attraction of non-yielding commodities such as gold, with analysts saying the next key milestone will be $1,044 an ounce, its 2010 low. Others are even more bearish. Jeff Currie, New York-based head of commodities research at Goldman Sachs, said earlier this week in remarks reported by the Daily Telegraph that downward pressures affecting all commodity markets could force gold down below $1,000 an ounce. The paper says ABN Amro Bank's Georgette Boele and Robin Bhar of Societe Generale also believe bullion will approach this symbolic threshold by December. But others expect a recovery. CNN Money cites George Gero, vice president of global futures at RBC Capital Markets, who says gold might be able to withstand the strong dollar, which reduces buying power for gold, and that it should be "due for at least a short-term bounce next week". Profit Insider says there is reason to suspect China, which revealed disappointing levels of gold buying this week, could be set to invest more heavily in the metal to meet targets set by the International Monetary Fund to qualify the Renminbi as a reserve currency, which would prompt a surge. It suggests that the gold price could reach $2,500 an ounce, but not until later next year. Gold price: six reasons it slumped – and why it could stay low 22 July The gold price mounted a modest recovery yesterday following a sharp fall on Monday, but after closing below $1,100 for the first time in five years it is still hovering around this key threshold. Analsts once predicted that gold prices would surge to $5,000 an ounce, but now many are saying that the precious metal could fall back through the $1,000 mark before the end of the year – and a slump into three figures could well trigger more falls. Investors are beginning to take notice. Listed funds tracking the metal, which have been growing in popularity, saw the biggest outflow in two years on Friday, The Times reports. So what is driving the recent slump and is it likely to continue? 1. The strength of the US dollar The US dollar has been gaining in value on the back of consistently positive data on the economy, which spells bad news for gold. As the Daily Telegraph notes, the value of the greenback typically has an inverse relationship with commodities. Why? Like other commodities, gold is priced in dollars on international markets. This means that when the dollar rises investors have less buying power and commodities become more expensive, "muting demand and sending commodity prices lower", the paper says. 2. The strength of the US dollar, part 2 But that isn't the only reason that gold sinks with the dollar surges. The Economist suggests that the declining gold price is also a product of investors re-evaluating the real price of the metal in response to currency movements. Essentially, if the dollar increases so does the nominal value of any asset quoted in dollars. But if this runs counter to investors' perception of the market, they are likely to sell to ensure they aren't caught out later. 3. Interest rate rise Another factor emanating from the US is the recent talk of an interest rate rise. The Federal Reserve has been dropping strong hints that it may increase the base rate from 0.25 per cent sooner rather than later, and possibly this year. That will diminish the attraction of non-yielding assets. Since gold provides neither a dividend nor an income, ther is an opportunity cost of holding the asset. That may be worth paying in bad times, when interest rates are low and the gold price is likely to be rising. When markets are improving, interest rates are rising and returns are increasing, that opportunity cost starts to pinch. 4. China Not all the factors driving down the gold price originate in China: The Times points to China as another source of gold-sapping news – and, more specifically, to data showing that the country, which has designs on making its own Renminbi a reserve currency, has not been buying up gold in the quantities many have anticipated. China's gold reserves were up 57 per cent, but this was about half what was expected. As a share of total reserves, China's holdings were actually in decline. Chinese acquisitiveness was one of the key assumptions underpinning the market in recent years, so this constitutes a major hiccup. 5. Less bad news Greece has stepped back from the abyss – at least for now. The global economy seems to be trundling along and Western countries are seeing a return to growth. An apocalypse predicted by many, which would have scared investors into assets such as gold, has not happened. 6. Technical trades This last point is one often missed in analyses of any sharp market fall. Many trades are now executed on an automated basis, the Telegraph says, with software which is designed to buy or sell when a price hits a given high or low level to manage risk in big portfolios. Gold has reached the sort of low where the 'stop-loss' trades kick in, further fuelling a sell-off. The irony is that these programmes are designed to limit risk exposure and losses when in reality they often exaggerate market swings and increase nominal losses. Will the slide continue? There certainly seems to be a consensus that gold is not going rebound strongly any time soon. Some think the inflation-adjusted price for gold is even lower than $1,000, so it's not out of the question that prices could continue to fall. But if the macroeconomic picture were to change and become more negative, or China were to start buying in the way analysts have been predicting, attitudes to gold would probably change quite quickly. Gold price 'to climb' on Greek exit from eurozone 16 July The gold price could rise "a lot further" if Greece defaults on its debt repayments and is forced to exit the eurozone, according to a leading independent economic research company. Investors are expected to use gold as a hedge if Greece fails to repay €1.6bn (£1.2bn) to the International Monetary Fund by the end of June, which could trigger an exit from the eurozone – or Grexit. Gold has been trading at around $1,180 per ounce this week, up 0.8 per cent in the past week and 0.5 per cent in the past month, the Sydney Morning Herald reports. And although gold price has been hovering between $1,170 and $1,210 per ounce for several months, many analysts now believe it could be set to climb as investors look to mitigate risks as Greece edges towards default. "We are only just starting to see signs of contagion from Greece to other bond and equity markets in the eurozone," Capital Economics analysts told investors in a note. "A Greek default alone may no longer be a huge surprise and the sums involved would be small in the global scheme of things. However, if the uncertainty undermines investor confidence in the rest of the region, the gold price is likely to climb a lot further." According to Capital Economics, the impact of a Greek exit could be more profound than many analysts are currently predicting because "if Greece's economy eventually thrived outside the eurozone, as we expect it would, this might fuel the rise of anti-austerity and euro-sceptic movements in other European countries". Gold price spike as chances of US interest rate rise recede 21 May Gold prices spiked yesterday after minutes from the Federal Reserve’s April meeting revealed officials doubt the economy is ready for an interest rate increase in June. Within second of the release of the "dovish" minutes from the Fed, spot gold climbed 0.5%, to a session high at $1,213.36, reports the Wall Street Journal. Although it fell back to $1,207.40 an ounce, it remained positive for the day. According to the Fed minutes, key officials at the April policy meeting believed that the current bump in US inflation was being offset by a weaker labour market and softer data. The cautious stance will boost gold and bonds, say analysts. "A close reading of the April minutes shows the committee remains extraordinarily cautious regarding a rate liftoff given members' emphasis on the first-quarter slowdown," Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York, told Reuters. "The bar remains quite high for an interest rate move and it appears quite unlikely that it will happen before September if even then." The knock-on effect on gold prices brings to an end a tricky period for the commodity. Since mid-March, gold prices have struggled to break out of a $1,170-$1,230 an ounce range, due to uncertainty over the timing of the expected rise in US interest rates. Higher interest rates tend to hit gold because they increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it the commodity is priced. Other metals were boosted yesterday. Silver gained 0.7% to $17.16 an ounce, while platinum was up 0.5% at $1,158.70 an ounce. Gold price pinned down despite Russian spree 01 May Russia's continuing purchase of bullion is a rare bright spot in a difficult period for the gold price, which has sunk to around $1,200 an ounce, a third below its peak in 2011. Moscow, where the central bank has been a notable buyer of gold, has tripled its holdings since 2005, reports The Economist. Last month alone it bought 30 tonnes, bringing its overall chest to 1,238 tonnes. Consumers in China and India have also continued to splash out on gold, but none of this has been enough to lift the metal out of a rut. That rut continues despite a host of factors that could be expected to boost prices. Uncertainty is supposed to lift the price of gold, yet turmoil in the Middle East and Ukraine, and dramas in the euro zone have failed to prompt a rally. Neither has loose monetary policy proved as much help as hoped. Investment guru Harry Dent writes: "We've seen everything gold bugs could hope for: endless money printing, zero per cent interest rates (both short-term and long-term adjusted for inflation), rising debt and debt ratios in the public and private sectors... So where's the damn hyperinflation?" Many argue that significant pressure is placed on the price of gold by the expectation that US interest rates will rise later this year. As banker Matthew Turner explains, low interest rates cut the opportunity cost of owning gold, while higher interest rates raise the cost of holding non-interest-bearing assets. Some believe that anticipation of rising rates is already built into current gold prices. Should the rise not come about as soon as expected, there could be a rally. Meanwhile, producers are struggling: half have negative cashflow, many are heavily in debt. Options such as Bitcoin, property and contemporary art are proving more tempting for many investors. Gold price falls despite weak US dollar 23 April The gold price fell below $1,200 yesterdat, as traders weighed the weakening dollar against the prospect that Greece could be forced out of the eurozone if it fails to meet its creditors' demands. Prices recovered slightly this morning, but remained at $1,190 per ounce at 1pm BST. "The trading range has become very tight over the past ten days and sideways performance like that is drying up liquidity," saidSaxo Bank senior manager Ole Hansen told Reuters. "If anything, in a day like this, with European markets down, I would be a cautious buyer looking for a potential bid on the back of the weaker dollar." Over the past month, the strong US dollar has put pressure on the gold price, but yesterday morning it shed 0.5 per cent of its value, heralding the possibility that the price of gold may soon start to climb. "We wait to see if the dollar weakens further; if it does, we would expect the metals to pick up," FastMarkets analyst William Adams said. Traders have also been following developments in the Greek debt crisis finances. If Greece does not agree to a comprehensive list of reforms by Friday, analysts say the country could take a step closer to exiting the eurozone. If the country is forced out of the joint currency, gold will become an increasingly tempting looking safe haven, Bullion Desk reports.

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