Gold Price Consolidation Around $3,300 (XAU/USD)
Gold has traded in a tight corridor between $3,270 and $3,328 per ounce over the past week, reversing an early-July rally that briefly tested $3,430. After the Federal Reserve signaled no imminent rate cuts and President Trump’s trade negotiations with China hinted at a possible August 1 tariff rollback, XAU/USD oscillated within this $58 range. Trading volumes have shrunk to $18 bn daily from July’s $25 bn average, highlighting investor caution as macro drivers battle technical resistance.
Q2 Global Gold Demand Surges to Record $132 bn
According to the World Gold Council’s Q2 2025 report, total gold demand rose 3% year-on-year to 1,249 t, while the value of that demand soared 45% y/y to US$132 bn. The average LBMA gold price climbed to a quarterly record of $3,280.35/oz, up 40% y/y and 15% q/q. Those price gains, coupled with escalating geopolitical and trade uncertainty, fueled the strongest first half for investment bars and coins since 2013.
Central Bank Purchases Moderate but Remain Robust
Official sector buying added 166 t to global reserves in Q2, down from 248.6 t in Q1 but still among the highest quarterly tallies seen this decade. Nation-state demand has largely been driven by the desire to diversify reserves amid “higher for longer” interest rates. Even as the pace slowed 33% q/q, central bank appetite for gold remains a stalwart pillar underpinning market support around $3,200 per ounce.
Jewellery Consumption Lags Tonnage but Rises in Value
Jewellery offtake fell 14% y/y to 356.7 t, its lowest quarterly volume since 2020, driven by muted consumer buying in Asia. Yet spending on gold jewellery rose universally, reflecting a $341.0 bn market value that belies softness in physical volumes. Indian consumers have increasingly swapped old ornaments for new or used pieces as collateral for loans, keeping retail sentiment buoyed even as tonnage retreats.
Investor Appetite: ETF Inflows and Bar & Coin Buying
Q2 saw bar and coin investment of 306.8 t, up 11% y/y, while global gold-backed ETFs attracted 170.5 t of net inflows despite the high price environment. Over-the-counter (OTC) investment and stock changes added a further 169.8 t, underscoring robust demand from high-net-worth and institutional investors seeking safe-haven exposure. The combined 477.2 t of direct investment far outstripped Q1’s 551.2 t, marking two quarters of outsized buying.
Supply Dynamics: Mine Output Hits 909 t and Recycling Stagnates
Mine production in Q2 reached an estimated 908.6 t, setting a new quarterly record and rising 1% y/y. Recycling contributed 347.2 t, up 4%, but remained subdued given near-record prices, as owners held onto assets rather than liquidate. Total supply grew 3% to 1,248.8 t, just matching the 6% uptick in demand and reinforcing tightness that propels price support above $3,200.
Macro Drivers: Fed Policy, Trade Deals and Dollar Strength
Fed Chair Jerome Powell’s insistence that rates will stay at 4.25–4.50% into late 2026 trimmed dovish expectations, causing gold to give back early gains. Dollar resilience—indexed at 103.6, up 0.5% this week—added headwinds for XAU/USD. Conversely, Mr. Trump’s remarks about nearing a “fair deal” with Beijing and separate pacts reducing tariffs on European and Japanese imports dampened safe-haven flows, leaving gold finely balanced between conflicting signals.
Technical Landscape: 50-Day EMA, Symmetrical Triangle and Key Levels
On the daily chart, gold’s collapse from $3,328 formed a symmetrical triangle whose lower trendline converges around $3,270. The 50-day EMA at $3,320 has repeatedly shrugged off rallies, marking a critical barrier. RSI sits at 42, flirting with oversold territory but not yet signaling a capitulation. A decisive close below $3,245 (May 29 low) risks a retest of $3,121 (May 15 low), while a breach above $3,350 opens potential to $3,500 in August.
On-Chain Flows and Insider Behavior
Though gold lacks blockchain data, insider proxies reveal miners and refiners selling into June’s peak, while jewellery manufacturers accumulate at lower spot levels. ETF holdings disclosed by major issuers show net additions worth $8.4 bn in Q2, aligning with bar and coin demand. This duality of selling from supply-side players and buying from investors underpins the consolidation phase as the market searches for a directional catalyst.
Strategic watchers eye the PCE inflation report on August 1 and the U.S. nonfarm payrolls on August 2 to gauge whether Fed rate cuts can reemerge as a credible driver. Until then, gold will likely remain range-bound between $3,270 and $3,328, awaiting a clear policy pivot or a surge in geopolitical tensions.
Given the interplay of robust investment inflows and supply-side selling amid firm dollar and rate expectations, a Hold stance on XAU/USD around current levels is advisable.
