Explained: Why gold investors should tone down expectations as yellow metal plunges to a 1-year low - The Economic Times

AI desk brief

Gold is under pressure as higher crude prices from renewed Middle East tensions are stoking inflation concerns and keeping the Fed tightening narrative alive; the article cites gold at a 1-year low and notes support at $3,886/oz, below which a deeper correction could unfold. BofA expects gold to stay below $4,000 over the next three months, while Standard Chartered says global gold-backed ETPs saw renewed outflows late last week, ending a stretch of resilient investment demand.

The article also highlights weakening physical demand and mixed central-bank flows: BofA’s tracker shows key buyer purchases down 16.6% YoY, Indian imports down 77.8%, and Chinese imports up 39.3%, while WGC data show Q2 jewellery demand fell 25% in the US, 15% in India and 28% in China. BofA flagged Turkey’s 82t and Russia’s 56t of net gold sales through August as examples of possible central-bank headwinds, even as longer-term house views remain bullish into 2027.