World Gold Council quarterly report: Bullion, ETF purchase spree, Gold demand sees the strongest start in nine years.
① The World Gold Council report states that in the first quarter of 2025, global gold demand is expected to grow by 1% year-on-year, reaching 1,206 tons, setting the strongest demand record for a first quarter since 2016; ② The report indicates that retail investors continue to Buy gold bars and coins, the investment enthusiasm for Gold ETF has also reignited, and central banks across various countries continue to purchase gold to diversify their Forex reserves.
Gold has come to a sudden stop, long positions have drastically decreased, and analysts warn that the trend has diverged from the fundamentals.
Barclays strategist Stefano Pascale stated that the surge in Gold Call Options after Trump's tariffs, leading to an inverted skew indicator, coupled with a sharp reduction in hedge fund long positions and the recent pullback in Gold prices, are all reasons to adopt a cautious outlook on Gold prices in the short term. The movement of Gold has already "decoupled" from the "fundamental drivers" such as the US dollar and real interest rates.
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Is a quick pullback in Gold a good opportunity to build a position? The fund manager bluntly stated: It is much more reliable than the US stock market!
①This week, gold prices in Shanghai fell after rising for seven consecutive weeks, with international gold prices dropping from a historic high of $3,509.9 per ounce to around $3,300; ②Some Fund managers suggest that investors take advantage of the pullback to gradually build up gold positions, emphasizing that gold has significant upside potential in the long term; ③It was pointed out that global financial market issues have already involved sovereignty, and the only way to resolve sovereign risk may be through physical gold.
How to understand the adjustment of Gold in this round?
Deutsche Bank stated that the recent decline in Gold is mainly due to the rebound of the dollar and the market's overinterpretation of tariff news. The tariff issues in the USA have not yet been resolved, and there remains significant uncertainty about the outlook, therefore the extent of the Gold pullback is limited.
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