As Gold trying to recover after testing the major 1675 support, ETFs continue to cut their holdings for the 19th day in a row. The two biggest factors that pushing ETFs to cut gold is hawkish central banks and rising yields. 

ECB hike rates to “0” while FED is expected to hike another 75 points tomorrow, showing no signs of slowing down. On the other hand, markets starting to price in rate cuts for the next year which might decrease the negative effect on gold. 

Another pressure point is coming from bond market correlation. Our model’s expected gold value is at 1316, the biggest difference from the spot price since the 2011 top. 

On the other hand, Europe and US might be on the brink of a recession. Expectations of a recession are still supporting the gold price. EU is dealing with gas problems with Russia as ECB starts to normalize rates. The US has a chance to enter a technical recession as close as this week. 

For further direction, investors can look at ETF holdings and the major 1675 support which is limiting the all downside moves in the post-pandemic era.