Gold’s lustre has suffered in the last three weeks, but it may have just cleared out weak investors.
XAUUSD – Weekly Chart
XAUUSD on the weekly chart shows a strong close after the slump to $4,400. That could signal speculative clearing, and gold could still move higher from here.
Gold prices are expected to remain supported in the coming months, despite short-term volatility. According to the latest Gold Report by Geojit Investments, gold has stabilized above the psychologically important level of $5,000 per troy ounce, after extreme volatility erased nearly half of January’s gains.
Bullion hit a record high of $5,594 per ounce on the London spot market in January before the market crashed. The pullback was driven by reduced expectations of US rate cuts and a cooling of geopolitical tensions.
A key driver of the gold outlook is robust investment demand, and recent reports highlight that total global gold demand in 2025 surpassed 5,000 tonnes for the first time. That drove the total market value to $555 billion.
Global gold exchange-traded funds saw holdings rise by 800 tonnes, the second-strongest annual increase on record. Bar and coin demand was also strong, with a 12-year high in physical safe-haven buying.
The new year has also started strongly with the strongest-ever monthly inflow into gold ETFs in January at $19 billion. That lifted the assets under management of gold ETFs to a record $669 billion globally. Total global holdings reached an all-time high of more than 4,000 tonnes, signalling strong investor confidence in gold as a safe-haven hedge.
As investors get confused about gold, it may just have been a washout of speculative traders. The underlying trends in geopolitics and gold buying have persisted.
