Gold Stuck at $4,000 as Central Banks Hoard Bullion

The gold market has been stuck around $4,000 per ounce for weeks, with buyers and sellers testing each other's resolve. Despite this, central banks are accumulating bullion at a record pace, purchasing 289 tonnes of gold in the second quarter alone.

This is a significant shift from retail and investor channels, which saw net outflows of 45 tonnes from exchange-traded gold funds and a 17 percent drop in jewelry demand. However, industrial demand ticked up to roughly 80 tonnes.

According to the World Gold Council, central banks expect to expand their gold reserves over the next twelve months, with 89 percent predicting an increase. This is a stark contrast to the current market conditions, where the dollar's strength and interest rate outlook are applying downward pressure on gold prices.