Johan Palmberg

Delaying our Gold Market Commentary until after the possibly volatility-inducing US election, we instead take stock of some interesting statistics regarding October's and the year-to-date stellar run-up in gold prices.

Gold has gained 3% this week largely attributed to an escalation of geopolitical tensions linked to the Israeli-Palestinian conflict.

Gold price weakness in June, according to GRAM, was largely the result of a rise in US Treasury yields, a fall in volatility, US dollar strength and ensuing outflows from global gold ETFs.

Monday, July 19 marked an eagerly anticipated milestone for the UK. ‘Freedom Day’ as it was dubbed, officially closed the chapter on over a year of local COVID-19 restrictions. But it arrived amidst soaring cases of COVID-19 worldwide – the UK included. Concern over the new variant strains has not only put a dampener on the reopening in the UK, but perhaps the global economic recovery.

Is the current commodity rally just another reflationary episode or something more pervasive? Recent market moves in commodities rank in the top 5% of six-month moves since 1971. Gold's weak performance so far is consistent with previous reflationary episodes – its time to shine may yet come.