Bullish Sentiment Meets Inflation Fears as China Buys Gold

Gold prices may be influenced by recent developments in the global economy and investor sentiment. Peter Schiff, a well-known critic of US monetary policy, warned that the US Treasury's plan to buy back debt could lead to higher inflation. According to Schiff, this move will shorten the average maturity of the national debt, increasing exposure to rising short-term interest rates.

The Global Fund Manager Survey (FMS) by BofA found that investor sentiment remains bullish, with 71% of investors expecting an AI-related event to have little impact on markets. However, positioning is shifting towards recommending investors rotate within risk assets rather than reloading.

China has been increasing its gold reserves through the London OTC market, reportedly buying over 40 tonnes in June alone. Goldman estimates that China purchased around 88 tonnes of gold through OTC markets across May and June.

Billionaire Ray Dalio suggested diversifying portfolios by investing in gold, bonds, and 'a bit of Bitcoin'.