Gold Holds Near Key Support as ETF Demand Surges

Gold is currently under pressure after a significant pullback from its recent highs, testing a critical support level near $4,100. The metal’s price has fallen from the $4,700 area to around $4,156.99, with buyers defending the $4,100.36 support zone. If this level holds, a rebound could be possible, but a confirmed breakdown would shift focus to the $4,000 support.

Despite the pullback, gold ETFs continue to see strong demand, with investors adding 143,200 troy ounces in the latest session, extending a five-day buying streak. Total known ETF holdings have reached 100.9 million ounces, the highest since August 2022. The World Gold Council also reported August inflows of $18 billion, with holdings hitting a record 4,189 tonnes. This sustained buying suggests that some investors are using the price dip to increase exposure.

Technically, gold must hold the $4,100.36 support and reclaim the 4,184.69-4,194.58 resistance zone to regain bullish momentum. A break above this zone could target $4,400, followed by $4,700 and $5,001.99. Conversely, a failure to hold $4,100.36 would weaken the outlook, potentially pushing gold toward $4,000.

Central banks are also continuing to buy gold to diversify reserves and hedge against uncertainty. According to the World Gold Council, 89% of reserve managers expect global central bank gold holdings to rise over the next 12 months. This long-term demand could provide additional support to gold prices.