Gold prices have rebounded toward USD 4,200 per troy ounce following a steep decline in the second quarter, according to Commerzbank’s Carsten Fritsch [1]. The second quarter saw gold fall by 14%, marking its sharpest quarterly decline in 13 years, with the total decline for the first half of the year amounting to slightly more than 7% [1]. Over the last two days, gold has recovered by around USD 200 and is on track for its first weekly rise in five weeks [1].
Fritsch attributes the recent rebound to weaker US labour data and reduced expectations for further interest rate hikes, though he notes that the price rise began even before the labour market data was released [1]. He characterizes the move as corrective, following what he describes as an excessive prior decline that was steeper than could be explained by changes in interest rate expectations alone [1].
The analysis also highlights that dips below USD 4,000 per ounce have been short-lived, suggesting a potential bottoming process for gold prices [1]. Fritsch concludes that unless expectations for interest rate increases rise significantly again, gold is unlikely to fall further from current levels [1].
CONCLUSION
Gold has staged a notable rebound after a historic quarterly drop, with Commerzbank viewing the move as a corrective response to an earlier excessive decline. The short-lived nature of price dips below USD 4,000 and stabilizing rate expectations suggest a potential bottoming out for gold in the near term.