Gold ETF demand has accelerated across both domestic and international markets. In China, seven major gold ETFs tracking the SGE Gold 9999 index saw their combined assets increase by around RMB 21.3 billion over the past week, with more than RMB 6 billion coming from net subscriptions.
Globally, the trend is also improving. The world's largest gold ETF, SPDR Gold Shares, increased its holdings to more than 1,020 tons as of August 10.
The World Gold Council also reported that global gold-backed ETFs attracted around $3 billion of inflows in July, ending two consecutive months of outflows.
Why Is Gold Rising Again?
The latest rally has been supported by several factors. The first factor is the result of the softer labor market in July, after the payrolls unexpectedly declined by 23,000.
Secondly, a falling Treasury yields and a potentially weaker dollar also supporting the gold. Same goes with volatility, as the current geopolitical uncertainty continues to strengthen demand for traditional safe-haven assets.
Could Gold Reach $4,500?
Several major institutions remain structurally bullish on gold. Some forecasts now see gold moving toward $4,700–$5,000, while UBS has projected a potential move above $5,000 next year, with a target of around $5,200 by June.
However, its sharp rebound could attract trend-following investors, but stronger-than-expected inflation could quickly push yields and the dollar higher. Therefore, the next major catalyst could be this week's CPI report.
A softer-than-expected reading could strengthen expectations for easier monetary policy and provide another boost to gold. But a hotter CPI print could trigger a rebound in yields and the dollar, putting short-term pressure on the metal.
The Bigger Picture
Gold's rally is no longer being driven by just one factor. ETF inflows, central-bank buying, monetary policy expectations and geopolitical risks are increasingly moving in the same direction.
The question now is whether this is the beginning of another major leg higher, or simply a sharp rebound within a volatile market.
Will gold break above $4,500 and move toward $5,000, or is the market getting ahead of itself?
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