Precious metal has advanced amid a plunge in commodity prices to 16-year lows, with RBC saying seasonal buying may offer a near-term boost.

We expect gold/silver to remain weak over the balance of the year driven by our expectation of the FOMC hiking rates in September despite recent action by China to weaken the Yuan. We expect to see some improvement in gold prices over the near term driven by seasonal demand from India and would expect a further improvement in 2016 supported by fundamental demand out of China/Emerging market countries as well as steady central bank buying. A deferral of the expected September Fed rate hike or an increase in systemic risk due to (1) a resurgence of the Greek economic risk within the Eurozone through or (2) further Chinese devaluation of the RMB could also improve sentiment and result in a firmer gold price.