On the gold market, the rally could at least lose momentum. This is because the quarterly report on gold demand will probably show that, while investment demand is strong, physical demand is weakening due to high demand, Commerzbank’s Commodity analyst Barbara Lambrecht notes.

Weakening physical demand to dampen the bull market

“The quarterly report of the World Gold Council, to be published on Wednesday, is likely to confirm that long-term investors are showing increased interest in gold – inflows of almost 100 tons were recorded in gold ETFs in the third quarter – but high prices are likely to have an adverse effect on physical demand, especially in Asia.”

“This is at least suggested by the significant drop in China's gold imports. Data for gold shipments in September will be published by the Hong Kong Statistics Authority on Monday. In India, the reduction of the import tax in August had led to a significant increase in imports, but in September, gold imports had already fallen again.”

“We think that a weakening of physical demand will dampen the bull market in the long term.”