Gold Price Weakness Extended, Amid Low Volatility

SEATTLE (Scrap Monster): The latest gold market commentary published by the World Gold Council (WGC) indicates that weakness in gold price continued in March this year, amidst notable dip in gold volatility.

The yellow metal, which reported price weakness in the opening two months of the year, continued the same trend in March as well. It finished the month at $1,619 per Oz, lower by 3% in comparison with the prior month. By the end of March, gold prices reported a year-to-date decline of over 10%. It recorded the worst quarterly performance since Q1 2016. The prices slipped by as much as 18% from the peak level witnessed in August 2020, said WGC in its report.

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However, gold’s one-month implied volatility stood at close to 14% at the end of March this year. This is considerably lower when compared with the historical realized average of 16% and the average levels recorded during the previous year. Gold was in contrast to most other risk-on assets, which reported increased volatility trends. This highlights gold’s key role as an effective risk management tool.

The WGC report also suggests that retail demand for gold has picked up during the first quarter of 2021.