After a week of losses that pushed gold to the lower end of its range over the past few weeks, the metal stabilised to some extent but could remain under pressure.
The broader environment remains challenging, with expectations for a more restrictive global monetary policy stance continuing to weigh on sentiment.
Tensions in the Middle East have kept oil prices elevated, fuelling concerns that inflationary pressures may persist for longer than previously expected.
This dynamic has continued to support both the US dollar and government bond yields. Benchmark US 10-year Treasury yields have climbed to their highest levels since early 2025, while yields across Europe were also higher as markets increasingly anticipate tighter monetary policy.
Expectations that the European Central Bank and the Bank of England may raise rates in the coming months reinforce the view that borrowing costs could remain elevated for an extended period, reducing gold’s appeal as a non-yielding asset.
Investment flows have also reflected this cautious backdrop. Gold-backed ETFs have shown only limited investor participation in recent weeks. Weak investment flows could leave gold exposed to more downside risks.
Looking ahead, while short-term headwinds remain significant, gold continues to retain constructive long-term drivers. Sustained central bank accumulation, resilient demand from Chinese investors, and persistent geopolitical tensions in Eastern Europe could help provide a floor for bullion and support its broader structural trend over the long term.
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