Gold prices have continued their strong advance with a test of the $3,700 level.
XAUUSD – Daily Chart
The real support for gold is now located at $3,431, with a smaller support level at $3,525.
Global gold Exchange Traded Funds saw their third consecutive month of inflows in August, once again driven by Western funds, according to the World Gold Council. Assets under management rose to another month-end high.
Global physically backed gold ETFs drew US$5.5bn in August, resulting in a three month win streak. North American and European funds led the global buyers while Asia and other regions saw small outflows. Year-to-date inflows are now at US$47bn after hitting the second strongest on record after the peak of 2020.
Among some of the drivers for gold, the WGC noted that the UK, Switzerland and Germany led the buyers. Economic pressures in each of these countries have investors running to safe havens. A U.S. tariff of 39% was also applied to Switzerland and brought concerns for the country’s gold processing business.
Goldman Sachs analysts said that gold could hit $5,000 by 2026 if Fed policy uncertainty and strong demand continue. That would be a further gain of around 35%. JP Morgan sees $4,000 by Q2 2026, while UBS expects gold to reach $3,700 by 2026.
An element of speculative flows is now heavily present in gold, and although the trend remains strong, traders should be wary of a pullback on negative headlines.
