Osama Al Saifi, Managing Director for MENA at Traze.com
Gold came under some pressure on Wednesday, slipping from recent two-week highs as investors booked profits and digested the first weekly ETF outflow since the start of August. The move reflected waning momentum, although underlying safe-haven interest helped limit losses.
Flows in gold-backed ETFs highlighted a more cautious stance. Global holdings fell by 5.2 tonnes in the week ending 22 August, driven by a 9.9-tonne decline in North America. Gains in Europe of just over 5 tonnes were insufficient to offset the pullback.
However, physical demand in Asia remained robust, with China’s July net imports via Hong Kong more than doubling from June, while the central bank extended its gold-buying streak to a ninth consecutive month.
Political frictions around the Federal Reserve remained a key focus and could provide support for gold prices. President Trump’s attempt to oust Governor Lisa Cook over alleged misconduct sparked renewed debate over the Fed’s independence.
Attention now turns to Friday’s release of the Fed’s preferred inflation gauge, the PCE Price Index, which could shape expectations after Powell’s dovish tone at Jackson Hole. Softer inflation could weigh on US treasury yields and benefit the metal.
Geopolitical tensions could continue to support gold. Ukraine confirmed that Russian forces had advanced into the Dnipropetrovsk region, while the humanitarian toll escalated in Gaza as Israeli operations deepened. Additionally, trade frictions also lingered after Washington signaled higher tariffs on India and threatened additional measures on China.
