In the previous edition of the Market Overview, we pointed out that “geopolitical risks clearly won with a hawkish Fed in a tug of war in the gold market.” However, the French presidential election was a turning point for the yellow metal, which started to decline after centrist Emmanuel Macron triumphed in the first round. Gold lost about 4.8 percent between April 21 and May 9, when the recent rally has begun. Does it mean more bearish outlook for the gold market?

In this edition of the Market Overview, we will provide an investors update on recent fundamental drivers of the gold market, answering the question how the medium-term outlook for the gold market has changed over the last month. In particular, we will outline a macroeconomic outlook in the context of a ‘reflation debate’. Is reflation coming or was the recent uptick in inflation only temporary? We will also analyze geopolitical changes and their possible implications for the gold market, focusing on the impact of diminished risk premium on the yellow metal. We will also examine how the EUR/JPY exchange rate can affect the price of gold, as some analysts point out the negative correlation between this cross rate and gold price. And finally, we will find out whether gold mining production has peaked and whether it is important for gold investors at all.