EBC Markets Briefing | Bullion firms but ETFs saw persistent outflows

Gold prices edged up on Tuesday. Gold to oil ratio decreased to roughly 47 from over 78.8 hit on February, but historically the reading tends to force its way back toward the long-term mean of 15, said EBC Financial Group analyst.

Israeli PM Netanyahu said the war against Iran and its Lebanon-based proxy Hezbollah "has not yet ended" after Iran ceased strikes, though he insisted both are weaker than ever.

Gold has become the world's largest reserve asset, moving ahead of US government bonds, according to the ECB report, following years of heavy buying by central banks.

The report said those banks hold more than 36,000 tonnes of gold, close to the level seen during the Bretton Woods era. The biggest additions to gold reserves since 2022 came from China and India.

Investments in physically-based gold ETFs were negative last week, making net inflows negative for the fourth week in a row, data from the WGC showed. It was the highest exit by investors from ETFs this year.

Last month Goldman Sachs reiterated its bullish view on gold, sticking with its forecast for prices to reach $5,400 by year-end. Still the strategists cautioned that the metal could face short-term pressure.

Gold was demonstrating a dominant bearish structure. If the price fails to break decisively above 4333.93 and prints a bearish reversal candle, look to short toward the 4290 floor.

Asset recap

As of market close on 8 June, among EBC major products, Intel shares led gains after a report that Google and Nvidia are considering the chipmaker as a backup manufacturer for advanced processors.

TEL Connectivity has traded below both its 50-day and 200-day moving averages since late April, signalling weakening technical momentum and a bearish near-term trend.

The Australian dollar dived to two-month low as interest rate fears gripped markets. The currency, often traded as a proxy for global risk, has borne the brunt of flare-up in the Middle East.

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