Gold ETF Holdings Soar as Price Falls
Gold's recent three-week slide has created an opportunity for investors as gold-backed exchange-traded funds (ETFs) reached a record high of 4,189 metric tons in August. The price of gold fell 0.4% to $4,388.40 on September 11, marking the third weekly loss due to softer oil prices reducing near-term inflation-hedge demand.
The rise in oil prices above $100 a barrel has sustained input-cost pressure despite consumer prices matching forecasts, increasing pressure on non-yielding gold. Rate-hike odds rose to 67% from 62%, making it more expensive for investors to hold bullion.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that buyers returned near $4,300 support, showing demand remained active during the pullback. COMEX net longs rose 39% or 212 metric tons in August to 753 metric tons.
The outcome of Monday's meeting between Gulf ministers and Iran on a temporary Hormuz shipping deal will be crucial in determining gold's safe-haven demand. A confirmed deal could reduce oil's risk premium, while failure could sustain oil prices above $100 and support gold.