Gold: Central bank demand underpins prices – ING

ING strategists Warren Patterson and Ewa Manthey report that Gold has edged lower after an early advance as traders await the June Federal Open Market Committee (FOMC) minutes, but the metal trades in line with evolving US rate expectations and remains supported above $4,000/oz. Ongoing Strait of Hormuz security concerns and persistent official‑sector buying, led by China, underpin the outlook.

Fed path and China buying in focus

"Gold edged lower in Tuesday’s afternoon trading after an early advance as investors looked ahead to the release of the June Federal Open Market Committee minutes later this week for further clues on the Federal Reserve's policy path. The metal continues to trade largely in line with shifting US rate expectations. Last week's weaker-than-expected jobs data reduced expectations of additional tightening and helped gold stabilise back above the $4,000/oz level."

"Meanwhile, official-sector demand remains supportive. Data from the People's Bank of China showed it increased its gold reserves for a 20th consecutive month in June. This marks its largest monthly purchase since late 2023."

"The continued accumulation highlights China's ongoing efforts to diversify reserves and reinforces a broader trend of strong central bank buying. It should continue to provide an important source of support for gold prices despite recent volatility."