Gold prices edged up 0.3% to finish July at US$3,299/oz. A stronger US dollar contributed to positive returns in all major currencies. Year-to-date, gold remains up 26% (Table 1).
Our Gold Return Attribution Model (GRAM) suggests a positive contribution from a rise in inflation expectations and tariff tensions via our geopolitical risk metric (both Risk and Uncertainty factors). Momentum factors also contributed positively, while a stronger US dollar proved a heavy drag on returns in July (Chart 1).
Gold ETF inflows of US$3.2bn (23t) were split almost equally between North America (US$1.4bn, 12t) and Europe (US$1.8bn, 11t), while Asia slightly increased (US$0.1bn, 0.8t) and other gold ETFs (-US$0.1bn, -1t) experienced mild outflows. COMEX managed money net longs continued to build positions following the April trough.
Gold price and performance in key currencies*
| USD (oz) |
EUR (oz) |
JPY (g) |
GBP (oz) |
CAD (oz) |
CHF (oz) |
INR (10g) |
RMB (g) |
TRY (oz) |
AUD (oz) |
|
| July price* | 3,299 | 2,890 | 15,989 | 2,498 | 4,571 | 2,680 | 98,068 | 767 | 134,027 | 5,134 |
| July return* | 0.3% | 3.6% | 5.0% | 4.3% | 2.2% | 2.8% | 2.5% | 0.5% | 2.4% | 2.8% |
| Y-t-d return* | 26.4% | 14.7% | 21.2% | 19.8% | 21.8% | 13.2% | 29.2% | 24.4% | 45.3% | 21.8% |
| Record high price* | 3,435 | 3,006 | 16,079 | 2,575 | 4,743 | 2,812 | 100,130 | 830 | 138,096 | 5,393 |
| Record high date* | 13 Jun 2025 |
22 Apr 2025 |
23 Jul 2025 |
22 Apr 2025 |
22 Apr 2025 |
22 Apr 2025 |
23 Jul 2025 |
22 Apr 2025 |
23 Jul 2025 |
22 Apr 2025 |
*As of 31 July 2025. Based on the LBMA Gold Price PM in USD, expressed in local currencies, except for India and China where the MCX Gold Price PM and Shanghai Gold Benchmark PM are used, respectively.
Source: Bloomberg, ICE Benchmark Administration, World Gold Council
With recent attention focused firmly on central banks, gold ETFs and Chinese investors, we thought it worthwhile to revisit what the so-called ‘fast money’ positioning on COMEX is telling us. One would think that given where gold prices are, investors would be loaded to the gills. We know this not to be the case as a share of overall portfolios, but it doesn’t appear to be the case in absolute terms either.
Chart 2 shows managed money net longs, typically representing hedge funds and larger financial institutions (dark blue line). These positions are above average, but it’s still a bit surprising they’re not higher—especially considering where gold prices are right now.
It can probably be pinned on an unwind of the tariff-fear trades in early 2025, and perhaps a bit of profit-taking. The stark sell-off in futures began well before the intraday spot priced peaked at the end of April. Looked at through a z-score lens1—so relative to recent trading ranges—this was a sharp capitulation (light blue dotted line).
COMEX futures investors have recovered some of this lost ground, but this reset leaves us with the view that they have capacity to rebuild positions – a sentiment echoed for ETF investors in our Mid-Year Outlook.
One proviso is that fundamentals support that buying, and we think they do:
This decoupling of gold prices from inflation-linked bond yields (TIPs) is well documented by now with central banks, emerging market investors and a sprinkling of term premium the likely culprits.
But US futures investors have not decoupled from real yields, they still care. Yes, their sensitivity might be a little lower, likely due to term premia, but it’s still highly significant as Chart 4 shows.4
Yields, alongside the US dollar on a REER basis, are sitting at a level whereby the path of least resistance is arguably down, with the caveat of near-term upward pressure (Chart 5).
Rates are probably already restrictive, so if the front end eases, the long end might follow suit. The weak labour market data in early August is edging us towards this outcome. This could also happen mechanically if lower policy rates stoke longer-term inflation fears, something that swap rates are currently hinting at (Chart 6).
Managed money investors will likely become more sensitive to rates when they drop – as was often the case pre-COVID when a 100bps change in yield, holding all else constant, was associated with a c. 20% shift in positioning (Chart 7).
Notwithstanding the risks we laid out in our Mid-Year Outlook and in What’s a bear case for gold?, if rates ease, risks linger, and the dollar stays soft, we could see managed money step back in with more conviction, particularly following the weak US labour market data in early August. This would support further flows into gold ETFs and could aid gold prices now that central banks have tailed off a bit. It’s not a done deal, but the pieces are lining up.
Regression of weekly changes in COMEX futures on US dollar changes and US 10-year TIP yield changes, controlling for momentum factors*
| Dependent variable: | COMEX Managed Money net long as a share of open interest | ||
|---|---|---|---|
| 15–years coefficient | 5–years coefficient | Description | |
| Constant | 0.00 | 0.00 | Constant insignificantly different from zero |
| Δ log DXY | −0.73 *** | −0.49 *** | Negative sensitivity to US dollar |
| Δ US 10–year TIP yield | −0.06 *** | −0.05 *** | Negative sensitivity to US 10–year TIP yield |
| Δ managed money (T−1) | 0.17 *** | 0.12 ** | Positive short-term momentum – likely CTA effect |
| Δ managed money (T−2) | −0.06 * | −0.11 * | Negative medium-term mean reversion |
| Adj. R-squared | 0.20 | 0.21 | |
Data from 13 June 2006 to 15 July 2025, weekly Tuesday-to-Tuesday, HAC standard errors. Sensitivities reflect the dependent variable in units of % ie 0.1=10% while the yield is in units of % * 100. Thus, a 100bps fall in the TIP yield is associated with a 5-6 percentage point change in positioning currently but this was as high as 22 pre-Covid. Charts 4 and 7 deploy the same regression but on a rolling 2-year (104 week) basis.
Source: Bloomberg, World Gold Council
1For more information on z-scores please see here: Z-Score: Definition, Formula and Calculation - Statistics How T.
2In July 2025 54 of 74 contributors to Bloomberg Economist forecasts for the EUR and JPY expect the dollar to weaken by Q1’26 with a median fall of 2.8%.
3Dollar exit could be crowded for some time | Reuters
4Directional consistency is more important to p-values than matching magnitude.
