Gold consolidates strong gains; Downside risks mount for crude

Gold consolidates strong gains; Downside risks mount for crude

The commodity sector has maintained  positive momentum so far this August with the Bloomberg Commodity Index trading higher for a fourth consecutive month. However, following the pandemic-led collapse during the first quarter, the year-to-date performance remains in the red by 11%. Gains have so far this month been broad-based, led by the energy sector and industrial metals. The risk of rising inflation and the weaker dollar remain two key supporting themes that continue to attract attention. Improved U.S. data earlier in the month and the lukewarm approach to yield-curve control that was signaled in the latest FOMC minutes have led to a small rise in bond yields this month. This has helped to trigger profit-taking in gold which, following its July 8.5% rally, has run into consolidation. This