Gold holds steady despite risk in volatile markets

The yellow metal, gold, continues to attract demand, with the latest correction attempts being too shallow to force any major reduction risks from managed money accounts that depend on momentum to maintain

and build exposure.

Gold investment demand has shown some signs of divergence in the past month, with managed money accounts, such as hedge funds and CTAs, reducing bullish bets while demand for bullion-

backed ETFs continues at a brisk pace. While hedge funds focus on momentum and short-term technical developments, ETF investors tend to be a bit stickier, with the latest increase potentially seen as a hedge

against stagflation in the US.

Gold Prices in Oman

22k RO34.6

24k RO36.9

18k RO27.2

According to Ole Hansen, Head of Commodity Strategy, Saxo Bank, beyond geopolitical tensions and the potential breakdown of a world order that has prevailed for generations, traders and investors are also reacting to a sharp and sudden deterioration in US economic data. This has led to increased pricing of stagflation risk—a period characterised by lower growth, rising unemployment, and

increasing inflation. Forward-looking indicators suggest these developments could materialise in the coming months, thereby lifting the expected number of 25 basis-point rate cuts this year to more than three from a

January low of just one cut.

With that in mind, the outlook for gold remains supportive, particularly given the recent dollar weakness and the limited depth of the latest correction, where prices have bounced back before getting anywhere near a

key area of support between 2,790 and 2,811.

In addition to diversification and safe-haven demand, gold will likely continue to benefit from central bank buying and fiscal debt concerns.

Spot gold trades up 11%

year-to-date, with the one-year gain approaching 34%, and while we are aware that a deeper correction may unfold, we maintain our recently raised target of USD 3,300.