Gold Prices Pull Back as Analysts See Consolidation
The gold price has retreated slightly after its sharp August advance, but analysts at UBS believe this is just consolidation and not a change in trend.
According to RBC Capital Markets data, gold ETF inflows are strengthening, with 894,000 ounces of physical gold added through August 21. Global ETF holdings reached around 98 million ounces, up 1.7 million ounces quarter-to-date despite the year-to-date figure remaining slightly negative.
CFTC net-long gold positions also rose by about 5,000 contracts to 219,000, which UBS sees as a sign that futures positioning is no longer doing all the work. ETF flows are now lining up with price, giving the rally a broader base.
UBS analysts expect resistance at $4,670, followed by $4,770 and $4,890, but also see support at $4,520, $4,380, and $4,305.