Gold Bounces Back Above $4,000 as Dollar Weakens and Central Banks Step In, but ETF Outflows Tell a Different Story
Published on 07/04/2026 at 07:14 | Redaktion boerse-global.de
Gold clawed its way back above the psychologically critical $4,000 mark to close the week at $4,187.30 an ounce, a 2.04% weekly advance that masks a deeply divided market. The recovery from last week’s dip — the first time the metal had traded below that threshold since October — was fueled by a plunging dollar and easing geopolitical tensions, even as western institutional investors continued to flee.
The catalyst for the rebound was the greenback’s biggest weekly slide since April, which made gold cheaper for buyers outside the US. That dovetailed with a drop in oil prices as progress in US?Iran talks — Qatar reported “positive advances” on a memorandum of understanding — calmed fears about supply disruptions in the Strait of Hormuz. Lower energy costs reduce inflation expectations and take pressure off the Federal Reserve, allowing gold to regain some of its safe?haven appeal.
Yet the bounce is happening against a backdrop of persistent western disinvestment. The SPDR Gold Shares, the world’s largest gold?backed ETF, held about 1,013 tonnes in mid?June, down more than 57 tonnes since the start of the year. Suki Cooper of Standard Chartered calculates that 298 tonnes of gold held in ETFs are now underwater, with many positions clustered around the $4,000 region — roughly where the metal touched its 52?week low of $3,901.30 last October. That selling pressure is being absorbed by a very different set of buyers.
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Central banks remain a formidable counterweight. The World Gold Council’s latest reserve?manager survey shows 89% of respondents expect to increase their gold holdings over the next 12 months, and 45% of the 76 institutions polled plan outright purchases. The market is pricing in more than 600 tonnes of official?sector buying this year, the bulk from emerging economies. This structural support, combined with a surge in ETF buying from investors seeking protection against a potential financial crisis, has helped keep the longer?term bull run intact — gold has roughly doubled since the start of 2024.
The price action has also been shaped by the shifting stance of the Federal Reserve under new chair Kevin Warsh. His first rate decision was perceived as surprisingly hawkish, and Goldman Sachs economists now see no rate cut this year, pushing expected easing from December 2026 and March 2027 to June and December 2027. Nine members of the Federal Open Market Committee anticipate an actual rate increase before year?end. That initially sent gold reeling from its January record of $5,626.80. But Warsh’s more recent comments, which Evercore’s Krishna Guha said “provided at least no reason to speculate about a July rate hike,” helped the metal recover from a nearly seven?month low in Asian trading.
Technically, the picture remains fragile. Gold is trading 5.16% below its 50?day moving average of $4,415.02 and well under its 100?day average of $4,648.46. The relative strength index sits at 46.6, a neutral reading that offers no clear direction. The next Fed decision is not until July 28?29, with the June CPI release on July 14 providing the next major data point. Until then, the $4,000 level will serve as the crucial psychological reference. Defend it in the coming weeks, and the focus could shift back to the structural upside that the World Gold Council says remains unbroken despite the latest consolidation.
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