Gold slipped to $2,010 last week but XAU/USD is still holding up surprisingly well. Economists at Commerzbank analyze the yellow metal’s outlook.

Gold price defies headwinds from investors

The Gold ETFs tracked by Bloomberg recorded outflows on eight consecutive trading days. With two exceptions, there have only been ETF outflows since the beginning of the year. The last time there was a stronger monthly outflow was in September. The scaling back of the exaggerated Fed rate cut expectations in recent weeks is likely to have played a role here.

There was also selling pressure from speculative financial investors. According to the CFTC, their net long positions fell to 61 thousand contracts in the last reporting week ending January 23, which was the lowest level in three months. Within the last three reporting weeks, positions were reduced by 44% with the equivalent of 150 tons of Gold sold on the futures market.