A Dramatic Shift in Gold: Retail Exodus Meets Central Bank Accumulation

Gold sees its worst weekly drop in years, falling to near $4,444/oz as ETF outflows hit $6B. Central banks buy physical gold despite the sell-off, with J.P. Morgan forecasting $6,300 by year-end.

The price of gold has experienced one of its most severe weekly declines in recent years, shedding approximately 9% of its value. After trading stably around the $5,000 per ounce mark at the start of the week, the metal now hovers near $4,444, following an intraday dip to $4,337 in early trading.

This sharp correction was triggered by a confluence of bearish pressures. The Federal Reserve is maintaining its benchmark interest rate within the 3.50% to 3.75% range while continuing to signal a restrictive policy stance. A persistently strong US dollar, coupled with higher-than-anticipated US producer price data mid-week, accelerated the sell-off. Paradoxically, this downturn is occurring against the backdrop of an ongoing US-Iran conflict, which has driven energy prices to monthly highs. Gold had previously rallied on increasing fears of an attack on Iran; investors are now unwinding that previously priced-in risk premium.

Analyzing the Sell-Off: A Tale of Two Buyers

The nature of this liquidation is revealing. Market data shows a significant structural rotation underway. The SPDR Gold ETF (GLD) saw outflows exceeding $1.5 billion in managed assets last week alone. Over three consecutive weeks, total withdrawals surpassed $6 billion, equivalent to a reduction of 25 tonnes in gold holdings. This represents the fund's largest weekly loss since 2022. The selling pressure peaked on March 19, with GLD recording an estimated single-day outflow of $2.9 billion—its most substantial one-day loss in over a decade.

Behind these figures lies a clear divergence in strategy. Generalist funds and systematic hedge funds, which had been riding the upward price momentum, are now retreating. In stark contrast, state institutions from Asia and the Middle East are continuing to build their physical reserves. Analysts at J.P. Morgan forecast official sector purchases of 800 tonnes for 2026, identifying reserve diversification as a persistent structural trend.

Technical Perspective and Price Forecasts

From a technical standpoint, the next key support level rests at $4,401, with further floors at $4,331 and $4,203. A sustained move above $4,490 would signal a potential bullish setup, targeting a rise toward $4,620. The current spot price remains roughly 20% below the all-time high of approximately $5,598 recorded in January 2026.

J.P. Morgan raised its year-end price target for gold to $6,300 per ounce in February, citing sustained central bank and investor demand. The bank has outlined an even more bullish scenario, suggesting that if private households were to increase their gold allocations from about 3% to 4.6% of assets, prices could potentially reach a range between $8,000 and $8,500. Looking ahead, the upcoming release of US PMI data for March may provide fresh market impetus, potentially supporting arguments for a Fed pause or offering further strength to the dollar.