Gold Holds $4,000 Support as ETF Inflows Hit Monthly High
Gold surged past $4,100 an ounce as the largest ETF inflow in over a month signaled investors are establishing a price floor despite macro headwinds from elevated yields and escalating US-Iran tensions.
Spot gold rose 1% to $4,121.42 an ounce in Singapore trading, building on a nearly 2% advance from the previous session. Silver climbed 2% to $59.75, while platinum and palladium also moved higher.
The price action was driven by a notable shift in institutional positioning. Exchange-traded funds recorded inflows of around 7.4 tons on Tuesday, marking the highest daily addition in more than a month and suggesting active capital deployment rather than passive holding.
“It’s probably a breakout following the volatility crush over the past few days,” said Justin Lin, an analyst at Global X ETFs. “It seems like buyers have successfully held $4,000 and selling pressure has faded,” he added.
This dip-buying emerged even as macroeconomic conditions typically hostile to non-yielding assets remained firmly in place. Treasury yields stayed elevated, and crude oil prices ticked higher as the US-Iran conflict entered its tenth day without immediate prospects for a ceasefire or negotiation.
US President Donald Trump downplayed the likelihood of immediate talks with Iran following mutual strikes near the Strait of Hormuz. Houthi militants simultaneously threatened commercial shipping in the Red Sea, keeping a premium on energy costs.
The geopolitical friction and accompanying inflation fears had previously ended gold's multiyear bull run. Prices had fallen roughly 25% from a January peak near $5,600 an ounce. Traders are now forced to balance those persistent energy-driven price pressures against softening US economic data as they hunt for clues about the Federal Reserve's interest rate trajectory.
“Gold is struggling for direction,” Morgan Stanley analysts including Amy Gower wrote in a note, citing a divergence between supportive central bank purchases and ETF selling driven by rate-hike fears. The bank expects ETFs to return to the market if the Fed holds rates steady this year before cutting in 2025, forecasting gold at $4,450 and silver at $65.40 by the fourth quarter.
The Bloomberg Dollar Spot Index was stable after a 0.2% gain in the previous session. A steady dollar removes a significant headwind for dollar-denominated commodities, aiding the current rebound.
