Gold Price Supported by ETF Buying and Central-Bank Demand

The gold market has witnessed a significant shift in recent months, driven by two distinct sources of demand.

Gold Exchange-Traded Funds (ETFs) have seen inflows of $3 billion in July, with European funds accounting for most of the increase. This marks a notable change from earlier this year, when investors were comfortable concentrating exposure in technology and other risk assets.

The return of ETF buying suggests that some investors are rebalancing their portfolios rather than continuing to increase risk exposure indefinitely. This is significant because ETF flows often reflect changes in asset allocation by institutional investors, wealth managers, and multi-asset funds.