Gold price tests critical support as investment demand cools

The current technical threshold sits at $3,886 an ounce. A sustained breach of this level could leave the market vulnerable to further downside, even as the asset moves into oversold territory. Recent outflows from global gold-backed exchange-traded products have signaled a shift in investor sentiment, ending a period of resilient demand as liquidity needs and broader market jitters drive profit-taking.

While macroeconomic headwinds persist, including the inverse pressure from a strong U.S. dollar and expectations for further Federal Reserve interest rate hikes, Standard Chartered maintains a bullish long-term outlook. The bank forecasts average prices of $4,650 an ounce in the fourth quarter, rising to $4,850 by early 2027. This optimism is anchored by the expectation that physical demand from Asian markets—particularly India ahead of the Diwali festival—will eventually provide a necessary cushion.

China’s market remains a relative bright spot, with imports reaching 144.9 tonnes in September, a three-month high. However, the immediate horizon remains precarious. Elevated energy prices continue to feed inflation concerns, forcing investors to weigh the risk of further monetary tightening against the metal’s historical role as a hedge. Until a firm price floor is established, market participants should prepare for continued turbulence.