Gold prices surged above USD 4,400 per troy ounce for the first time since early June, driven primarily by strong demand from ETF investors, according to Commerzbank’s Carsten Fritsch [1]. Over the last four trading days, gold ETFs saw inflows totaling 14.5 tons, with global gold ETF inflows in July reaching 23.5 tons, mainly from Europe and Asia [1].
This price rally occurred despite a sharp increase in oil prices and only modestly higher interest rate expectations following disappointing US labour market data released on Friday [1]. Fritsch notes that interest rate expectations remain lower than they were prior to the labour data, suggesting that the gold rally is not being driven by macroeconomic fundamentals alone [1].
Commerzbank’s outlook remains sceptical, with Fritsch expressing doubt that gold can continue to defy the pressure from higher oil prices and rising rates for an extended period [1]. The analysis implies that the current price surge may be unsustainable if macroeconomic conditions shift further [1].
CONCLUSION
Gold’s recent rally above $4,400 per ounce is attributed to robust ETF inflows, particularly from Europe and Asia, despite a backdrop of rising oil prices and only slightly higher rate expectations. However, Commerzbank remains cautious, questioning the sustainability of this move if macroeconomic pressures persist.