ETO Markets Global Pulse: Gold Slips 0.24% Despite Central-Bank Buying

Market Review

According to ETO Markets monitoring, on July 6 (Monday), spot gold retreated from a two-week high, falling 0.24% to close at USD 4,164.75 per ounce. A stronger USD remained the main source of pressure.

On July 7 (Tuesday) during early Asian trading, spot gold moved in a narrow range around USD 4,164 per ounce. Near-term upside remains limited by continued USD strength.

Global Headlines

Central Banks Buy 41 Tonnes

World Gold Council data showed that global central banks purchased a net 41 tonnes of gold in May, the second-highest monthly increase this year. Poland added 18 tonnes, while the PBOC purchased 10 tonnes. Together, the two central banks accounted for nearly 70% of total net buying.

FED Hike Odds Reach 75.4%

According to CME FEDWatch data, markets price a 74.3% probability that the FED keeps rates unchanged in July, while the chance of a 25bp hike stands at 25.7%. By December, the probability of no change is 24.6%. The chance of a cumulative 25bp hike is 42.5%, while the probability of at least 50bp in hikes stands at 32.9%.

Waller Backs Forward Guidance Use

FED Governor Christopher Waller said forward guidance can still effectively communicate the future rate path and influence financial conditions when used properly. However, he noted that the FED has sometimes relied on it too heavily, limiting policy flexibility. New FED Chair Kevin Warsh previously pledged to reduce its use.

Trump Sees Faster Ukraine Peace

Trump said the Russia-Ukraine conflict could end faster than expected. He described Russian President Putins desire to reach a settlement as “very strong” and said Ukrainian President Zelenskyy also wants the conflict to end quickly. Further discussions are expected during the NATO summit.

Russia US Contact To Continue

Kremlin spokesperson Dmitry Peskov said Putin and Trump both expect bilateral contact to continue soon. Russia remains open to peace negotiations on Ukraine and expects the US to continue its mediation role. Peskov said Trumps position on Ukraine has remained consistent.

US Reserves Hit 43-Year Low

US Department of Energy data showed that the Strategic Petroleum Reserve fell by 6.2 million barrels in the week ending July 3, reaching 319.5 million barrels. This was the lowest level since April 1983. Since the conflict began in late February, combined US commercial inventories and strategic reserves have fallen by 120.71 million barrels to 734 million barrels.

ETO Markets Analyst View (Spot Gold)

Spot gold remains below a key turning point, with 4,245 acting as the main resistance level. If prices regain and hold above 4,245, upside potential may expand, with resistance levels at 4,385 and 4,425.

If gold remains below 4,245, support at 4,170 and 4,110 will stay in focus. Overall, gold remains in a low-level consolidation phase while the market reassesses direction.

RSI is moving higher, showing that short-term momentum is recovering. However, gold has not yet broken above 4,245, so the sustainability of the rebound still requires confirmation.

Markets are currently pricing USD movements, FED rate expectations, and global central-bank gold demand. Gold may continue to trade within a volatile range in the near term.

Disclaimer

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