Central bank purchases and softer Fed rate hike expectations drive gold prices toward key resistance at $4,504.
Gold prices approached $4,500 as institutional and central bank demand surged, reversing a June selloff that pushed the metal below $4,000. A $1.50 per ounce premium in China and large-bar purchases signaled strong sovereign and institutional interest, offsetting earlier liquidity-driven declines during the Iran conflict.
The rally follows a January peak of $5,595 before a sharp correction, with recent softer U.S. inflation and payroll data cutting September rate hike odds to 33%. The dollar’s two-month low and reduced Fed tightening bets have bolstered gold’s appeal, though technical resistance at the 200-day moving average near $4,504 and overbought signals cap near-term gains.
Modest ETF inflows of $7 billion against $582 billion in assets under management, weak jewelry demand, and stalled Iran negotiations temper bullish sentiment. Analysts frame the shift as a stagflationary hedge, though caution persists at elevated levels.