Gold Prices Stagnate Amid ETF Inflows

Gold prices have stalled near $4,160 an ounce despite a significant influx of money into gold-backed exchange-traded funds (ETFs). The US-listed gold ETFs attracted $3.8 billion in September, following $7.9 billion in August.

This contrast between investment demand and price action suggests that long-term investors have not abandoned bullion. Amy Gower, Morgan Stanley's head of metals and mining strategy, noted that ETF demand has remained resilient even as markets anticipated Federal Reserve tightening.

Gower also pointed to central-bank buying, particularly from China, and said Morgan Stanley sees $4,000 an ounce as a floor. However, the selling pressure appears concentrated elsewhere, with algorithmic and momentum funds reversing their positions due to technical signals deteriorating.

The inflation report released on Wednesday showed a 0.3% rise in personal consumption expenditures prices in August, below expectations. This led to softer Fed expectations, but gold still struggled to build momentum, despite the reduced probability of an October Federal Reserve rate increase.