Commodity analysts Amy Gower and Martijn Rats emphasize that while central bank purchasing may hold steady, the broader market relies on ETF demand to sustain a major rally. Current data indicates that higher-for-longer interest rate expectations have pushed U.S. 10-year real yields above February levels, triggering net outflows from gold-backed funds. This shift has effectively neutralized the price support typically provided by geopolitical instability, including ongoing tensions in the Middle East.

Energy-driven inflation continues to complicate the Federal Reserve's path, forcing markets to price out anticipated rate cuts. Gower notes that gold has become trapped in a cycle where policy responses to supply shocks overshadow its function as a hedge. Although the bank maintains a bullish long-term outlook, expecting relief from lower oil prices and easing conflict, they caution that the opportunity cost of holding non-yielding assets remains a primary headwind. Unless the Federal Reserve pivots toward easing—with potential cuts now projected for early 2027—the metal faces a difficult climb to reach the firm's ambitious year-end targets.