Q3 to be the weakest quarter for gold

Activity in the gold market has continued to ebb and prices have become becalmed in an increasingly stagnant market. 

The $50 trading range of $1170-1220 in which gold has been stuck for the whole of Q2 is the least volatile period for the yellow metal since before the financial crisis, and this might not be the calm before the storm, as there is little sign of any pick-up in investor interest. 

ETP flows for the year to date have fallen below 10 tonnes and there have been net outflows over the past two months, despite all the Greece rhetoric.

US monetary policy still holds the key for gold and prices are unlikely to move out of their recent trading range until the Fed's path becomes clearer. Q3 could be the weakest quarter for gold, given rate hike expectations and weak price floor,says Barclays.

But thereafter, gold is expected to stage a mild recovery on better physical demand.