A scarcity of economic data and an absence of corporate news to digest will no doubt have contributed to the current uncertainty. This has contributed to the volatility in gold’s spot price, though ultimately the precious metal is continuing its general recovery.
The gold price recovery can arguably be credited to two main factors. Firstly, almost all of the major gold-mining companies have written down their holdings in the asset over the last couple of months. Secondly, we have seen an upturn in the demand for the physical product. This increased demand has coincided with an upturn in economic data from China.
In the background is the worrying performance of the Indian rupee, which has dropped over 20% against the US dollar since May. Behind China, India is the second largest consumer of gold and its diminishing spending power is something traders should to keep an eye on.