Gold’s GLD ETF inflows soar despite short-term pullback

Gold price has held in a tight range as the bulls lack enough momentum to retest the support-turn-resistance zone of $4,200. Notably, a stronger US dollar and expectations of a hawkish Federal Reserve have curbed the bullion’s gains, at least in the short term. 

However, gold’s safe-haven appeal remains steady as investors worry about the health of the US and global economies. From inflation concerns to a struggling property market in China, US government debt, and worries over an AI bubble, the global economy is under immense pressure.

Notably, these woes have been captured in the fear & greed index, which ended the week at an extreme fear level of 11. While this is an improvement from the previous session’s level of 6, it is a decline from last week’s 21 and last month’s 28. 

Steady demand from institutions and individual investors has held gold price steady above the crucial zone of $4,000 an ounce. This has bolstered gold ETF inflows as investors seek exposure in the metal’s historic rally. 

According to the World Gold Council, the US led this year’s inflows with investors pouring in $43.3 billion in GLD gold ETF, iShares Gold Trust (IAU), and other funds year-to-date. China’s gold ETF inflows are at $13.7 billion ytd; the second-largest across the globe. The Asian country’s total gold ETF assets are now at $31.4 billion; placing it fifth in the world after others like Germany, Switzerland, and the UK..  

GLD gold price technical analysis

GLD ETF | Source: TradingView

The SPDR gold shares ETF ended the week in the green but remained range-bound for the second week in a row. While the bulls remain in control, expectations of a hawkish Fed and a stronger US dollar have curbed its upside potential.

In the short term, the tight range between $370 and $385 will be worth watching. Notably, this range matches the middle and upper Bollinger bands. The neutral RSI of 52 further supports this thesis on sideways trading. 

Even with the possible pullback past that tight range, I expect GLD gold ETF to hold steady above the lower support zone of $360. Notably, the derivative has been trading above that level since rallying above it for the first time on 6th October. 

On the flip side, the lower prices may attract more buyers as economic uncertainties sustain gold’s safe-haven appeal. From this perspective, the buyers may have a chance to push GLD gold price closer to the all-time high hit a month ago. However, it would likely face resistance slightly below that level at $397.