The price of gold is under pressure due to falling expectations of rate cuts. However, economists at Commerzbank see only limited potential for further decline.
The development of physical demand in Asia will hardly affect prices
“Hopes for any rate cuts in the US in the near term have been dampened this week, which weighs the price of gold. A new report on the US labor market will be released at the end of next week. If it shows further cooling, as many observers expect, that would likely lower rate expectations, especially if a compromise is reached in the US debt dispute, allowing economic indicators to re-determine the trajectory of interest rates.
“On the contrary, the development of physical demand in Asia, as evidenced by the export of Swiss gold and China Gold imports from Hong Kong will hardly affect prices, especially as exports and imports are likely to turn out to be somewhat weaker due to the high price level.
