📝Gold Fundamentals Remain Strong: ING

For gold, the recent correction does not appear to reflect a change in the underlying macro narrative. Safe-haven demand, ongoing central bank purchases, and the outlook for real rates remain supportive over the medium term.

While shorter term drivers triggered the latest rally, the foundation of gold’s multiyear uptrend remains the steady accumulation by global central banks. This phase began in 2022 following Russia’s invasion of Ukraine, which prompted a reassessment of reserve security and diversification strategies. Since then, that official sector demand has been a consistent and stabilizing force in the gold market.

Although central bank purchases moderated slightly last year, institutions remain significant net buyers. At current price levels, and following the recent correction, central banks are likely to become more active again. Their demand tends to be strategic, long-term and largely insensitive to short term price swings, reinforcing gold’s structural support over the medium term.

That said, near-term price action is likely to remain driven by macro data, policy expectations and dollar movements, rather than a smooth continuation of the rally. - ING