Key Takeaways:
Central bank demand: Q2 net purchases of 289 tonnes, up 62 percent year over year (World Gold Council)
London spot gold held at $4,077.54 an ounce on Aug. 4, up 0.84 percent in July, as central bank buying offset ETF outflows.
Global physically backed gold funds recorded $8.9 billion of net outflows in June, cutting holdings by 74 tonnes to 4,047 tonnes, according to World Gold Council data.
First-half flows remained positive at $8 billion, with Asian funds adding $12 billion in the strongest January-June period on record. Q2 central bank net purchases reached 289 tonnes, up 62 percent year over year.
Gold last traded above $5,600 in January. Deutsche Bank maintains a $4,600 year-end target, while BofA cut its 2026 average forecast 14 percent to $4,360 an ounce. The June JOLTS report due Aug. 4 is the next catalyst.
June's outflow marked the sharpest monthly retreat of the year, with assets under management falling 13 percent to $526 billion. Yet the monthly figure obscures a broader trend: Asian funds added $12 billion in the first half, the strongest six-month period on record, while North America was the only region to post first-half outflows. Daily trading volume in June rose 23 percent month over month to $6.9 billion, according to the World Gold Council, suggesting elevated turnover rather than investor abandonment.
Chinese gold ETFs attracted roughly RMB 11.76 billion of net inflows over the past month, with HuaAn Gold ETF's assets recovering to RMB 92.66 billion and Yongying Gold Stock ETF to RMB 13.19 billion. The domestic flows mark a shift from June, when retail investors debated whether to cut losses, to fresh buying near $4,000.
Q2 net purchases of 289 tonnes by central banks and other official institutions marked a 62 percent year-over-year increase, according to the World Gold Council's quarterly report. The group's 2026 central bank survey found 45 percent of respondents expect to increase gold reserves over the next year, though analysts cautioned that the pace of buying may slow from the past four years.
BofA cut its 2026 average gold price forecast 14 percent to $4,360 an ounce, citing a hawkish Federal Reserve stance, but maintained a $5,000 target once the tightening cycle ends. Deutsche Bank kept its year-end 2026 target at $4,600, with its model implying a fair value near $4,700. JPMorgan flagged downside risk if the Fed resumes rate hikes. Citi projects $4,500 by Q4 2026 and $5,000 in H1 2027.
Spot gold faces resistance at $4,100-$4,110; a two-hour close above $4,110 would signal a bullish turn. Support sits at $4,020, with a break exposing the psychological $4,000 level. Gold at $4,077 is roughly 27 percent below its January all-time high and about 2 percent above the June low.
This article is for informational purposes only and does not constitute investment advice.
