The precious metal stood near $4,077 per ounce on July 30, down from earlier gains as demand cooled. Jewelry and investment buyers have pulled back, dampening the climb.
Demand trends
Gold bars and coins sold at 307 metric tons in the second quarter, down from over 400 tons in each of the first two quarters. ETF outflows and weaker discretionary buying have cut into momentum. Over-the-counter trades excluded, investment demand dropped to 262 tons in the latest period, a 46% drop year-on-year.
Central banks offered more support, buying 289 tons in Q2. Half-year purchases now total 345 tons, a pace matching last year’s record. For gold to stay above $4,000, UBS says 300 tons of official sector demand per quarter is needed.
Monetary policy as the key
Markets are pricing in more Fed hikes this year, which UBS says creates downside risk for gold. A pause followed by early-2027 rate cuts could reverse the trend. Lower real yields would reduce the cost of holding non-income gold and hurt the dollar.
Weaker dollar and inflation worries would boost gold’s role as a reserve and safe asset. Mine output rose to 966 tons in Q2, up from 948 a year earlier. Recycled supply fell to 326 tons, partly offsetting the production increase.
UBS outlook
The forecast lifts gold to $4,400 by September, $4,600 by December, and $5,000 by March 2027. The bull case sees $5,200 by mid-2027. A dip toward $3,850 could attract long-term buyers, though near-term caution remains.