Gold Prices Pause After Four-Day Rally Amid Renewed Dollar Weakness
Gold prices have paused after a four-day rally that lifted the metal by around USD 350, reaching a fresh three-month high near USD 4,700. The recent surge in gold was driven by investor demand, which has strengthened noticeably this month. Gold ETF holdings have risen by around 60 tonnes in August, putting it on track for the strongest monthly inflow since last September. Meanwhile, hedge funds have boosted their net long position in COMEX gold futures to an 11-month high.
The drivers that have brought traders and investors back to gold are likely to remain supportive in the coming months, including concerns about US fiscal sustainability and elevated debt levels, renewed dollar weakness, central-bank demand, and continued geopolitical uncertainty. However, some analysts warn that a sustained rebound in the dollar may remove an important source of support for gold.
From a technical perspective, resistance is seen around USD 4,770, while initial support is at the 200-day moving average near USD 4,519. The upcoming Jackson Hole symposium, which starts on August 27, is also expected to provide direction for bond-yield developments and interest rate policy intentions.