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Gold continues to rally after the latest US jobs report fueled renewed bets that the Fed will begin cutting interest rates this year. Analysts estimate that the Fed will start cutting in September and will make two cuts before the end of 2024. New jobs in the US labor market have slowed, the unemployment rate rose to 4.1%, and average hourly wages have cooled as well.

Politics: The UK has elected the Labour Party, and in France, the left-wing NFP party surged to victory on Sunday. Both parties ran on the promise of higher taxes and higher spending, which is not exactly good news for the market or investors. Although the outcome of the US election is not yet determined, it’s likely we’ll see significant policy changes there as well, creating further uncertainty in the markets.

Net Inflows: Central banks reported 10 tonnes of net buying in May via the IMF and other public data sources. Demand was moderate during the month, with monthly gross purchases of 23 tonnes, offset by gross sales of 12 tonnes.

Following the strongest month in over a year (May), global gold ETFs have now seen inflows for two months in a row. In June, European and Asian buying offset outflows from North America.

Sources: MKS PAMP, World Gold Council

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