Insights

More mixed data across the globe last week with US PMIs at loggerheads over whether the economy is reflating or stagflating. 

Central banks added a net 15t to global gold reserves in August, based on reported data from both the IMF and respective central banks. This is broadly in line with monthly net purchases between March and June, and signals a return to buying form after global reserves were unchanged in July.

Last week saw a mixed bag of PMI data: US, UK and India all softer but all remain in expansion territory. 

Last week saw a mix of central bank actions. The US Fed cut 25bps as expected yet with a less dovish tone while the BOE held rates unchanged and slowed its QT.

Gold prices regains momentum, hits new records; discounts narrow in India. Investment demand steers festive gold buying revival.

Global physically backed gold ETFs saw inflows three months in a row, adding US$5.5bn in August. North American and European funds led inflows while Asia experienced continued outflows. Supported by continued inflows and a higher gold price, global gold ETFs’ total AUM rose 5% to US$407bn, another month-end record. Meanwhile, holdings rebounded 53t to 3,692t.

Last week saw a blend of inflation trends and political challenges. In the US, mixed inflation data, cooling labor markets, and weakening consumer sentiment kept expectations of a Fed rate cut in place. 

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni, Senior Market Strategists at the World Gold Council, examine the forces driving gold to fresh record highs – from tariff clarity in the US to renewed investor demand and shifting interest rate expectations.

Last week's releases highlighted a softening U.S. labor market, reinforcing expectations for rate cuts.

Global central banks bought net 10t in July based on reported data, a moderate net allocation compared to previous months. Despite this slower pace of net buying, central banks continue to be net buyers of gold even in the current price range. 

Last week was dominated by concerns over Fed independence and uneven global economic momentum.

Last week, the US Fed signaled potential rate cuts amid mixed economic signals. The US labor market softened while business activity and housing data surprised on the upside.

As the festive and wedding season approaches, there are signs that gold jewellery demand is gaining momentum, and with investment interest holding firm, overall gold demand could receive a boost.

Over history, the world has adopted the currency of the leading country for global payments. The USD is, arguably, the first global currency untethered from precious metals.

Last week was data-heavy: while the US showed mixed economic signals, there were signs of slowing activity in China.

China’s official gold reserves rose further in July, the ninth consecutive monthly purchase. Wholesale gold demand saw a modest m/m seasonal rise in July, yet they remained below the long-term average. Gold ETF flows flipped negative and gold futures’ volumes cooled.

Last week saw new tariffs announced and higher tariffs take effect. Central banks in the UK and India made cautious, diverging policy moves. 

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni, Senior Market Strategists at the World Gold Council, unpack the latest macro trends and data influencing the gold market – from shifting investor sentiment and mixed US economic data, to renewed tariff tensions and policy unpredictability.

Central banks reported 22t of net purchases in June via the IMF and other public data sources. Based on available data,*demand saw a modest m/m increase for the third consecutive month. In H1, central banks reported net buying of 123t, a slight y/y decline from H1 2024.

Trade deals and tariffs, coupled with weak US labour market data, dominated sentiment last week, while both the Fed and Bank of Japan held rates steady as they monitor the impact of tariffs on prices.