ETF Surge Hides Bullish Signal for Gold Prices

The gold price has been relatively stable at around $4,350 per ounce after a quiet week, but beneath this surface calm lies a potentially significant trend. Investors have continued to add to gold-backed exchange-traded funds (ETFs), which has led to a growing divergence between ETF holdings and the price of bullion.

The Kobeissi Letter notes that gold ETF holdings tracked by Bloomberg have climbed to approximately 100 million ounces, approaching their highest level in at least nine months. This represents an increase of over 4 million ounces since their July low, recovering the decline recorded between April and July.

According to The World Gold Council's September 9 report, global physically backed gold ETFs attracted $18 billion in August, bringing their holdings to a record 4,189 tonnes. This demonstrates that investment demand has remained substantial even as gold prices have encountered resistance.