Speaking at the Fund Strategy Investment Summit in Pennyhill Park, Raw highlighted a number of crucial changes that have created greater stabilisation for the gold price since last year.
In particular a slowing in the rate of selling in the gold futures market occurred in the fourth quarter of last year, according to Raw, followed by signs that the sell-off in gold ETFs had finally stopped.
“The downside risk became much less on the futures side and while gold equities were still at risk, we began to be more positive that there was stabilisation in the gold price,” she added.
“The big change that has happened now year to date is that the scale of selling in gold ETFs have stopped.”
Although more optimistic on the outlook for the gold price this year, Raw did caution that some volatility is still expected from the futures market and risk premiums triggered by macro events.
“Now that we have seen this surge of buying in the ETF space back off, it is about the marginal buyer and seller in the futures markets which doesn’t affect the average but the daily price and therefore creates volatility. Year to date we have seen volatility driven mostly by this marginal buyer and seller in the futures market,” she said.
“However we see volatility in the gold price as stable and range bound around $1,250-$1,350, with volatility created by point events such as the Ukraine which add a risk premium because people want to own gold.”