Gold has been mostly range-bound, trading between 1620 and 1720, and the last traded level is 1650. It is widely expected that in the near future gold may remain in narrow ranges and the only factor which gives some potential for strength to gold at this point of time is the occasional talk of gold as a hedge against inflation and the uncertainties. But this property of gold as an asset class has been undermined to a large extent as evidenced by the fact that despite inflation having been very high in the US and in Europe and in other territories gold has not picked up. The rise in US interest rates and the likelihood of the hawkish stance of the Fed converting itself into rate hikes, which may go well into the next year as well, may keep gold prices at the lower end of the range. The current spell of gold weakness may continue till there is more concrete information on the state of the economy in the major economies, especially against the background of an aggressive central bank trade off unfavourable to growth and promoting stability.
