World gold prices are regaining strong momentum after a period of adjustment, as the precious metal has recovered from around 4,000 USD/ounce in mid-July to over 4,600 USD/ounce. According to the analysis “Gold has returned?” by Ms. Ewa Manthey – commodity strategy expert at ING Research – the return of investment capital is becoming an important factor for gold price prospects, besides the diễn biến of the USD, bond yields and monetary policy of the Fed.
The latest momentum of gold prices comes from the US bond market. The US Treasury Department unexpectedly announced an increase in the scale of long-term government bond repurchases, causing bond yields to fall in the short term and the USD to weaken. This is a positive development for gold, because the precious metal is valued in greenbacks and often benefits when the USD depreciates. At the same time, lower yields reduce the opportunity cost of holding gold – an unprofitable asset.
However, according to ING, the increase in gold prices is no longer simply dependent on bond yields. The fact that the precious metal continues to maintain its strength even when long-term yields recover shows concerns about the US fiscal outlook and the strength of the USD is playing an increasingly important role.
Gold prices also received momentum from the improvement of investment cash flow. According to data cited by ING, global gold ETFs attracted about 3 billion USD in July, thereby increasing gold holdings by about 23 tons. In August, cash flow continued to improve. On August 21, ETFs monitored by Bloomberg added about 18 tons of gold, the strongest one-day increase since September 2025.
This development is particularly noteworthy because the investment demand of ETF funds once weakened during the gold price adjustment period. The return of capital shows that investor sentiment is improving and may create more ground for gold prices in the coming sessions.
Besides investment funds, demand from central banks continues to be an important pillar. According to ING, central banks net bought about 51 tons of gold in June, raising the total net buying volume in the first half of the year to 102 tons. The gold buying activity of the official sector shows that the demand for diversifying reserves is still maintained, thereby creating a supporting foundation for gold prices in the medium and long term.
However, ING believes that the upward momentum of gold prices still faces a significant resistance force, which is inflation. Rising energy prices may make price pressure in the US more persistent, reducing the ability to ease monetary policy and maintain high yields. This is a disadvantage for gold, because high interest rates increase the opportunity cost when holding non-yield assets.
Therefore, US inflation data will continue to have a major impact on gold prices through interest rate expectations and the diễn biến of the USD. The market is particularly interested in the core consumer spending price index (PCE), an inflation measure closely monitored by the Fed, along with new signals about monetary policy.
The Jackson Hole Conference is also seen as an important test for the current upward momentum of gold prices. If the Fed signals tougher in the fight against inflation, bond yields and the USD may rise again, putting pressure on the precious metal. Conversely, if the Fed pays more attention to signs of economic weakness and leaves open the possibility of policy easing, gold prices will have more room to maintain their upward momentum.
ING currently forecasts the average gold price in Q4 at 4,150 USD/ounce. However, this price level is significantly lower than the current level. Notably, ING believes that the risk of price increase for this forecast is becoming increasingly apparent as ETF cash flow returns, the USD weakens and concerns about the US fiscal outlook increase.
This shows that the outlook for gold prices is changing significantly compared to the time ING made the forecast. If investment demand continues to improve, the USD maintains a weak trend and real yields do not increase sharply, gold prices may continue to remain high and expand the upward momentum.
Conversely, a reversal of the USD, a sharp increase in bond yields or a tighter signal from the Fed may trigger profit-taking after a rapid rally.
After surpassing 4,600 USD/ounce, gold prices are facing an important test. Whether investment capital continues to flow into ETF funds, along with the Fed’s response to inflationary pressure, will determine whether the current increase can develop into a sustainable upward trend or just a strong recovery of precious metals.
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