Gold Price Stubbornly Up Amid Institutional Demand

• Gold price remains supported amid intense ETF demands. 
• Downbeat US Service PMI helped gold buyers to post gains. 
• US CPI data due next week remains a key event for the gold traders. 

Gold price remains supported by a complicated mix of dynamics, with ETF demand playing a key role in offsetting a sharp fall in traditional consumer demand. While higher prices have discouraged retail buying, potential Fed rate cuts, weak economic data, and geopolitical risk keep the safe-haven gold’s demand intact. The total gold demand in the US fell 34% q/q to 124 tons but was up by 110% compared to the same period of 2024. This was attributed to robust ETF inflows during first half of 2025.

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Gold also found support from the economic front as the US ISM Services PMI fell to 50.1 in July, which is the lowest level in more than a year. The figures reveal sluggish growth in the American services sector, which comprises 75% of US GDP. Key components, such as business activity and new orders, softened, while price pressure surged to 2022 highs due to tariffs and rising commodity prices. On the other hand, weakness in the labor market also poses a threat to the greenback.

These developments have rapidly shifted the expectations for Federal Reserve policy. Markets are not anticipating a 92% probability of a rate cut in the September meeting, with a second cut possible by October. Even a cautious statement from Fed officials will be interpreted as a confirmation of easing policy.

Geopolitical concerns and sticky inflation due to tariff-related risks continue to keep gold’s demand underpinned. The institutional and central bank interest, combined with macro uncertainty, suggests gold’s demand will remain higher during the second half of 2025 as well.

The next major catalyst for gold traders is the US CPI data due next week, which will confirm whether the inflation is cooling or re-accelerating. Both scenarios will strongly influence the rate cut bets and, in turn, gold prices as well.

Gold price technical analysis: Poised to reclaim $3,400

The 4-hour chart for gold shows a strong bullish trend despite a pullback in Wednesday’s Asian session. The downside remains protected by the 20-period SMA and the swing low of $3,350. Other key moving averages also point to more gains. Meanwhile, the RSI stays above the 50.0 mark, suggesting further room for the bulls.

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The immediate resistance for gold appears at $3,390, which is the recent swing high ahead of the round number at $3,400. The 23 July high around $3,440 presents the ultimate upside target. On the flip side, the immediate support emerges at $3,350 ahead of $3,320.

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