Gold hits two-month low, but projected to rebound

Gold prices have hit a two-month low due to a stronger US dollar, leading to concerns in the commodities market. Donovan Braam, a Commodities Trader at RMB, shared insights on the current situation in the commodity space in an interview with CNBC Africa. Braam expressed concerns about the pressure on precious metal commodities, particularly platinum, which he described as being in a difficult space. He pointed out that gold recently broke significant technical levels, with the possibility of further downward movement towards the $1250 mark. The outlook on interest rates in the US is a major factor contributing to the pressure on commodity prices, especially with the anticipation of a rate hike. The impact of the US dollar and global factors such as OPEC's production stabilization efforts are also affecting commodity prices. Despite positive manufacturing data from China, Braam remains cautious about the Chinese economy's overall performance and its implications for global trade. He highlighted the interconnected nature of commodity markets and the influence of various factors on price movements. Investors are showing nervousness, as seen in the significant outflow from gold ETF investments. The market trends indicate a bearish sentiment in gold, with potential further declines in prices. The correlations between different commodity sectors remain strong, with prices being pushed lower across the board. Braam emphasized the importance of monitoring global events and market fundamentals to navigate the current volatile commodity market.