Global Metals Weekly: Gold headwinds from Iran and the Fed

Research evidence excerpt

Global Metals Weekly: Gold headwinds from Iran and the Fed

K)

Going forward, these vehicles are a good proxy for whether interest in the yellow metal daryna.kovalska@bofa.com

is changing. Still, there are pockets of buying in the physical market. Central banks, for Rachel Wiser

instance, resumed purchases in April, after some sales in March. Indeed, the World Gold Commodity Strategist

BofAS

Council’s latest central bank survey highlights that 89% of monetary authorities believe rachel.wiser@bofa.com

that global central bank gold reserves will increase over the next 12 months. China’s gold Noah Hungness

imports also rose to multi-year highs in April. Meanwhile, after increases in duties, Indian Commodity Strategist

purchases have been under pressure, but even those are close to multi-year averages. noah.hungness@bofa.com

Equity Research

US macro policy concerns keep long-term case alive Jason Fairclough >>

Research Analyst

While we acknowledge the near-term headwinds, the premise of our initial call for a gold MLI (UK)

bull market, when prices were still trading at $1,900/oz, is still in place: US economic jason.fairclough@bofa.com

policy remains unorthodox. Indeed, the fiscal deficit keeps running at around 6% of GDP, Matty Zhao >>

but foreign holdings of US Treasuries have declined. According to the latest central bank Merrill Lynch (Hong Kong)

gold survey, the majority of respondents (74%) see moderate or significantly lower US matty.zhao@bofa.com

dollar holdings within global reserves over the next five years. Linked to that, President Caio Ribeiro >>

Trump’s comments that Iran’s frozen assets should be released because “If we didn’t Merrill Lynch (Brazil)

give it back, nobody would ever invest in the dollar again” are worth noting. Either way, caio.ribeiro@bofa.com