Gold continues to trade in a comparatively tight range around $1,200/oz.
The supply and demand models suggest that price support around this level can be justified as jewellery demand manages to absorb mine and scrap supply, as long as investors do not liquidate positions, says Bank of America. Having said that, investors remain the marginal price drivers and sustained rallies are unlikely without a pick-up in noncommercial demand.
According to Bank of America, "US monetary policy will remain a key gold price driver. The upcoming rate hike (our base case is that the Fed will tighten in September) should make a sustained gold price rally unlikely in the coming weeks".
