Inflation, falling yields and the US dollar pushed gold higher

Key highlights:

The gold price rebounded 4.5% on the month,1 as inflation concerns grew and the US dollar weakened


Gold remains down 6% y-t-d, but has moved up closer to the psychologically important US$1,800/oz level


Sentiment via COMEX futures increased as net positioning rose 10% off March low
Outflows in gold ETFs continued, but slowed considerably in April – less than a fifth of those seen in March


China gold investment activity was muted in April as reflected in lower local trading volumes,2 but jewellery demand could receive a boost from postponed weddings


Surging COVID cases in India are raising concerns that the demand recovery seen in Q1 will slow


Swiss gold exports hit 10-month high in March, driven by higher demand in Asia

Looking forward, we expect inflation concerns and the direction of rates to remain an important driver of gold prices, while rising COVID cases could weigh on consumer demand but support investment.