A. M. 
According to data from Bloomberg magazine, the price of gold has once again defied expectations by surpassing the $3,800 per ounce mark, consolidating its second all-time high in less than a week. This remarkable and explosive rise, which has accumulated a rise of around 45% so far this year, is being driven by two institutional forces that signal a structural shift in the market.
The key report explaining this dynamic comes from Deutsche Bank.
Deutsche Bank analysis: Structural Shift
The German bank’s commodities analyst, Michael Hsueh, argues that the rally is not based solely on cyclical factors, but on a new pattern of inelastic institutional demand, with more lasting effects.
Exchange-Traded Funds (ETFs): Amplifying Demand
Demand for gold ETFs has exerted an up to 50% stronger influence on prices compared to the 2021-2024 period. While studies show that ETF flows respond to price (and do not cause it), their massive accumulation in this cycle acts as an amplifier, helping to “sustain rallies” initiated by a favorable economic environment.
Investment flows are among the three years of strongest accumulation in the history of these instruments.
Central Banks: The strong link
Central banks, along with ETF investors, have become the other pillar of “inelastic demand.” Their constant global purchases are creating a solid institutional demand base that allows the precious metal to consistently trade “well above the model.”
The fundamental driver: interest rates
The Deutsche Bank report is categorical in identifying the fundamental cause of the price: The bank states that “changes in rates, but not the dollar, cause movements in the gold price”.
This puts the interest rate market as the main driver. An expansionary bias from the Fed (Federal Reserve), which suggests future rate cuts, reduces the opportunity cost of holding gold, strengthening the “gold-friendly bias” in the long term.
The analyst warns, however, that if flows into ETFs were to stop or reverse, the market could be vulnerable to a correction.
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