Gold prices extended their rally last week, driven by robust central bank demand, particularly from the People's Bank of China (PBoC), according to ING analysts Ewa Manthey and Warren Patterson [1]. The PBoC increased its gold reserves by 640,000 ounces (approximately 20 tonnes), marking the largest monthly addition since October 2023 and bringing its streak of consecutive monthly purchases to 21 months [1]. This sustained accumulation underscores China's ongoing efforts to diversify its reserves and strengthen its position in the global bullion market [1].
Spot gold climbed above $4,320 per ounce on Friday, reaching its highest level since mid-June. This price surge was attributed to continued central bank buying and heightened Chinese investment demand, particularly through gold-backed exchange-traded funds (ETFs) [1].
Speculative sentiment in the precious metals market also remained strong. Managed money net long positions in COMEX gold reached their highest level since January, while net long positions in COMEX silver increased for the first time in five weeks [1]. These developments indicate broad-based investor confidence in the precious metals sector, fueled by both institutional and speculative demand [1].
CONCLUSION
Gold's rally has been underpinned by persistent central bank accumulation, especially from the PBoC, and robust investment demand in China. With spot prices hitting multi-month highs and speculative positions increasing, the market outlook for gold remains positive based on current trends.