Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade
Gold retreated on Tuesday after multiple consecutive sessions of gains, with prices easing following the surge that brought bullion close to record highs. The pullback appears largely driven by profit-taking, rather than a deterioration in the broader backdrop, which remains supportive for the metal.
Expectations of a more accommodative global policy stance continue to underpin gold. A softer dollar has reinforced this narrative, enhancing gold’s appeal. Attention is also turning to other major central banks later this week. The Bank of England is anticipated to cut interest rates, a move that could further support non-yielding assets. In contrast, the Bank of Japan is expected to raise rates, a development that could limit gold’s gains to a certain extent.
ETF flows remain constructive. Gold-backed ETFs recorded inflows of 21.5 tonnes last week, the strongest since mid-October, signalling renewed investor interest. At the same time, ongoing purchases by central banks continue to provide a solid medium-term demand base, reinforcing confidence in the metal’s strategic appeal.
Ongoing geopolitical risks continue to paint a bullish outlook. While peace talks progress, tensions in Eastern Europe remain elevated, as well as in other regions of the world. Together, these factors sustain gold’s role as a hedge against geopolitical instability.