Gold price holds gains as investors shift focus to equities

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Gold rises 0.72% to $4,106 today

Highlights

June saw amplified gold ETF outflows, led by China and Europe, as investors rotated toward equities amid falling gold prices.
Despite June's outflows, global gold ETFs remained net positive for H1 2024, cushioning longer-term downside pressure.
Gold trades with short-term bullish momentum near $4,106, but overbought signals and volatility suggest possible consolidation within the $4,066–$4,146 range over the next few days.

ETF outflows deepen as investors pivot to equities over gold

Global gold exchange-traded funds saw intensified outflows during June, led by Chinese and European funds reacting to declining gold prices and a shift of interest toward equity markets, according to Miningweekly. These ETF outflows signal a reduction in institutional participation and can pressure liquidity, making the gold market more sensitive to fluctuations in demand. Net inflows remained positive for the first half of the year, providing some longer-term support against June’s outflows, though the rotation toward equities highlights ongoing competition for investor capital.

Bullish signals and overbought conditions as buyers dominate intraday

On the hourly timeframe, XAU is trading above both the 20-period and 50-period moving averages, while on the daily chart, price remains well below the 200-period moving average. The Ichimoku Kijun is set at $4,069 and serves as the nearest support. The Moving Average Convergence Divergence (MACD) indicates a Buy signal, and the Average Directional Index (ADX) shows neutral trend strength. The Relative Strength Index (RSI) stands at 58.18 and is considered to be in Buy territory, reflecting positive momentum. However, the Stochastic RSI, Commodity Channel Index (CCI), and Bull/Bear Power are all overbought, suggesting that buyers currently dominate but conditions may be stretched. The Awesome Oscillator confirms ongoing bullish momentum intraday.

Upward bias persists amid risk of pullback from stretched momentum

In the short-term outlook for the next 2–3 trading days, gold is expected to fluctuate within the $4,066 to $4,146 range, typical for the current volatility band. Model probabilities suggest a 74% chance of an upward move, though overbought oscillator readings signal a potential for consolidation or a minor pullback should buyer momentum fade. Under the baseline scenario, gold should remain range-bound in this corridor. A decisive break above resistance could trigger an acceleration higher, while slipping below the Kijun near $4,069 may result in further downside.

Anton Kharitonov, analyst at Traders Union, notes that persistent ETF outflows in June highlight weakening institutional interest, especially from China and Europe. He sees technical signals as mixed, with gold holding short-term strength but still below long-term averages and key resistance. Momentum indicators show buyers in control, though several overbought readings suggest limited upside in the immediate term. "Base case remains range-bound between $4,066 and $4,146; any drop below the Kijun near $4,069 would turn the outlook negative for now."

Earlier, analysts noted that geopolitical disruptions and shifting global supply-demand balances can quickly alter the risk landscape for energy and commodity markets. The current environment of gold ETF outflows and shifts toward equities underlines the importance of monitoring investor positioning, with traders advised to watch for a break above $4,146 as a key upside signal or a move below $4,069 indicating short-term downside risk.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.