$4,000 Gold: A Support Level or a Sustained Breakdown?
Gold prices are declining for the second week in a row as the dollar and US Treasury yields remain strong. Despite these headwinds, gold has shown resilience, with many analysts attributing its strength to real demand from investors.
The US-listed gold ETFs saw inflows of $3.8 billion in September, while global gold-backed ETFs added a record 121 tonnes in the same month. China's central bank also purchased 20.2 tonnes in August, marking its 22nd consecutive month of purchases.
However, Bank of America analysts are questioning whether this demand will be enough to sustain gold prices at $4,000. They forecast that prices could fall towards $3,750 if elevated energy costs keep inflation and yields high.
The outcome may depend on Friday's employment report, which could push Treasury yields back up if the payroll growth is stronger than expected.