Gold’s round trip from a record $5,600 in January to a dip under $4,000 in July has opened opportunities for global asset managers.
A deep retreat— driven by elevated energy prices and inflationary shocks from the Iran war — flushed out speculative capital and opened an entry point for long-term holders, despite rising Treasury yields and growing bets on a Federal Reserve rate hike before year-end.
“The downdraft to $4,000, if you didn’t own it already, was a very good buying time,” said Michael Cuggino, president of the Permanent Portfolio Family of Funds. “The long-term macro story is still in place, and that’s bullish for gold.”
Sovereign Custody Shift
Custody of the metal is recently becoming yet another point of interest. According to Euronews, De Nederlandsche Bank said it moved 86 tons of gold out of New York and Ottawa, citing “increasing geopolitical unrest.” The Dutch central bank cut its US allocation to 18.5% from 31.3% and Canada to 18.5% from 19.7%, while lifting London holdings to 32.1% from 18.1%. Some 30.8% remains in the Netherlands.
London-held gold can be traded more easily, the bank said. “This makes it the quickest for DNB to deploy in a crisis situation.”
“We assume that we will never need to deploy the gold, but it is nevertheless necessary to strengthen our resilience and preparedness,” DNB President Olaf Sleijpen said. The Netherlands holds 612.4 tons, valued at €72.2 billion at the end of 2025.
A World Gold Council survey found 9% of central banks plan to diversify overseas storage locations over the next 12 months, up from 2% in 2025, while 7% intend to expand domestic storage. Venezuela has requested the return of about $4 billion of gold from the Bank of England, and the Bank of Korea disclosed its first gold allocation in 13 years, saying it plans to buy domestically refined bullion.
Official buying, meanwhile, is normalizing. Net central-bank purchases fell 54% to 23 tons in July from 51 tons in June, WGC data show, led by China at 20 tons and Poland at eight tons. Poland has added 90 tons this year, lifting reserves to 640 tons, while China has bought for 21 consecutive months.
The Debasement Trade Returns
Institutional investors are filling that gap. Bloomberg reported that Amundi SA, Europe’s largest asset manager, bought bullion expecting a return to $5,000 by year-end, while Pictet, Robeco and Fidelity International also added to holdings. Funds’ net-long position tracked by the Commodity Futures Trading Commission rose in the week ended Aug. 25 to its highest level this year.
“Gold is an asset that we consider to be cheap, a good hedge and reasonably liquid,” said Lorenzo Portelli, head of cross-asset strategy at the Amundi Investment Institute.
Global physically backed ETFs drew $3 billion in net inflows in July, reversing two months of outflows and lifting holdings by 23 tons to 4,068 tons, led by European-listed funds.
The catalysts are fiscal. Bridgewater founder Ray Dalio urged investors to put as much as 15% of their money in gold to hedge against a US debt crisis, as long-term Treasury yields hit multiyear highs.
Still, the technical outlook points to more downside for yellow metal. The August rally has arguably formed a head-and-shoulders pattern, with a neckline around $4,300 and the pattern’s height at about $400.
Gold daily chart, year-to-date; Source: TradingView
Thus, a decisive break of $4,300 risks a decline to around $3,900 – a level that sits below July’s low and one that would certainly test the resolve of recent buyers.
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