Institutions that have taken profits are assessing the timing to “re-enter gold”: the short-term focus is on the “stickiness of gold ETFs.”

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After a fierce surge in gold prices followed by a pullback to around $4,000/oz, the market is at a critical stage of contest.

According to Wind Chaser Trading Desk, JPMorgan's latest research report released on November 6 believes that although gold prices have recently retreated, institutional investors remain optimistic about gold's medium-term prospects, having cashed out short-term profits and seeking opportunities to re-enter.

After participating in the London Bullion Market Association (LBMA) Global Precious Metals Conference in late October and communicating with Asian clients, JPMorgan found that the market generally views the recent gold price correction as “healthy.” After explosive demand inflows in Q3 2025 and early October, such an adjustment is necessary and normal.

According to the report, participants are extremely optimistic about the long-term trend of gold prices, predicting that by the next LBMA conference on October 5, 2026, the average price will reach $4,980/oz.

Behind this optimism is the astonishing demand data for Q3 2025: total demand from investors (including ETFs, futures, gold bars and coins) and central banks reached about 950 tons, nominally worth about $106 billion, nearly 50% higher than the average level of the previous four quarters.

Short-term Focus: The "Stickiness" of ETF Flows and Re-entry Timing

The report points out that many institutional investors took profits and closed positions during last month's vertical surge in gold prices, and are now trying to determine when and at what price to re-enter. In the short term, everyone's attention is focused on the “stickiness” of recent ETF inflows.

Data shows that in the past two weeks, global gold ETFs saw net outflows of about 35 tons. However, this outflow is only about half the record 62-ton inflow for the week ending October 17. JPMorgan's analysis suggests the pace of outflows did not match the inflow frenzy, indicating current ETF holdings are “relatively sticky.”

However, risks remain. The report warns that if gold falls below the key $3,900/oz level, a deeper “shakeout” may be triggered. It is estimated that about 42 tons of recent inflows have a cost basis at $4,000/oz or higher, and these positions may face pressure to close if prices drop further.

Structural Support: Central Banks' Enthusiasm for Gold Purchases Remains Undiminished

The report believes that the persistent, price-insensitive buying by global central banks is the “cornerstone” supporting gold’s long-term bull market.

JPMorgan’s report offers encouraging data: in Q3 2025, global central bank net gold purchases totaled 220 tons, up 30% quarter-on-quarter, translating to an annualized purchasing rate of 880 tons. Notably, even with average gold prices at $3,668/oz in September, official reports showed net purchases of 39 tons—the strongest monthly figure since the start of 2025.

In September, the Brazilian central bank bought 15 tons of gold. In addition, the Bank of Korea stated at the conference that it plans to “consider increasing gold holdings from a mid- to long-term perspective," the first such signal from them since 2013. These signs indicate that central banks are buying from a top-down asset allocation perspective and are relatively insensitive to price fluctuations.

Diverging Demand: Weak Jewelry, Strong Bullion and Coin Investment

Physical demand is showing clear divergence. Data from the World Gold Council and other institutions show that high prices have hit jewelry demand. In Q3 2025, global jewelry demand by tonnage fell 19% year-on-year, with India's market experiencing a 31% drop.

However, retail investment demand for gold bars and coins remained extremely robust, up 17% year-on-year last quarter, partly making up for the weakness in jewelry demand.

This trend is especially evident in China: in Q3, Chinese jewelry demand fell 17% year-on-year, but demand for gold bars and coins rose 20%. JPMorgan believes that China’s recent adjustment of VAT policies will further incentivize investors to shift from jewelry to ETFs and investment bullion.

Potential Risks: Recycling Supply and Sentiment Reversal

Finally, the report mentions a potential risk worth watching: recycled gold supply. Currently, despite high prices, recycled supply growth remains “relatively moderate,” and in Q3 2025 it even fell about 1% quarter-on-quarter.

However, an interesting market dynamic is worth watching: holders tend not to sell early in a bull market. But if market sentiment reverses and gold prices drop sharply and persistently, panic selling could be triggered.

When holders start to worry that “they missed the best time to sell,” there could be a surge in recycled supply, adding supply pressure to an already falling market and exacerbating the price decline.

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The above highlights come from Wind Chaser Trading Desk.

For more detailed analysis, including real-time commentary and frontline research, please join [Wind Chaser Trading Desk Annual Membership]

Risk Warning and DisclaimerThe market is risky, investment needs caution. This article does not constitute personal investment advice, nor does it take into account the individual investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Invest accordingly at your own risk. ```