Axel Fabela Iturbe Explores Key Signals Shaping the Gold Market
Gold serves as a significant indicator of investor confidence globally. When uncertainties arise about economic growth, purchasing power stability, or policy credibility, gold becomes a key asset representing these concerns.
Gold serves as a significant indicator of investor confidence globally. When uncertainties arise about economic growth, purchasing power stability, or policy credibility, gold becomes a key asset representing these concerns.
Recent trends indicate that the "confidence premium" associated with gold is influenced by central-bank accumulation and the ability of Exchange Traded Funds (ETFs) to rapidly translate macroeconomic concerns into demand. Data from the World Gold Council highlights that 2025 experienced substantial gold ETF inflows, demonstrating the swift shifts in investor positioning.
While numerous factors affect gold, one consistent and significant driver is real yields (inflation-adjusted returns). An increase in real yields makes holding a non-yielding asset like gold less appealing, whereas declining real yields often bolster gold's attractiveness. This relationship acts like the "gravity" of the gold market, with other forces occasionally overshadowing it, yet it remains a persistent factor over time.
Central Banks: A Steady Source of Demand
Central banks have a different approach compared to speculative investors, often focusing on reserve diversification and long-term risk management . This creates a stable demand baseline not tied to short-term price targets. According to the World Gold Council:
The Central Bank Gold Reserves Survey 2025 indicates that 95% of respondents anticipate an increase in global central-bank gold reserves over the next 12 months, with 43% expecting their own reserves to rise. In 2023, central banks purchased 1,037 tonnes of gold, one of the largest annual totals on record, following a record level in 2022.
This demand is typically less price-sensitive than retail buying and tends to persist through market volatility.
Gold serves as a significant indicator of investor confidence globally.
In contrast to central banks' slow accumulation, ETFs represent a fast-moving market force. The World Gold Council reported that 2025 saw the strongest year of global gold ETF inflows , with assets under management more than doubling and holdings reaching record highs. This, combined with a steady official-sector accumulation, explains why gold prices can experience sudden shifts rather than gradual increases.
The pricing of gold is influenced by several mechanisms, with the LBMA Gold Price serving as a key global benchmark. This price is set through an electronic auction twice daily in London and is overseen by ICE Benchmark Administration (IBA). The benchmark aims to be tradeable and auditable under IOSCO principles. The ecosystem comprising spot, futures, OTC liquidity, and ETF creation/redemption facilitates multiple pathways for impacting price.
Key Indicators for Gold Market Analysis
Market analysts rely on a set of repeatable indicators to gain clarity rather than numerous narratives. A comprehensive checklist for analyzing the gold market includes:
Real yield trends: Both the level and market expectations of real yields are crucial. Consistency of ETF flows: Sustained multi-week flows are more significant than one-off spikes. Central bank activity: The baseline demand becomes more influential when speculative positioning is high. Currency versus gold trends: Divergences reveal whether the market focuses on "currency" or "confidence." Volatility shifts: Rising implied volatility often indicates tradable demand rather than mere commentary.
Axel Fabela Iturbe's approach, shaped by his background in finance and market analysis, emphasizes trend identification and risk control . His methodology involves a systematic approach to position sizing and capital allocation through a quantitative capital system, focusing on:
Market confirmation: Allow trends to dictate action, prioritizing trend over narrative. Position sizing: Treating sizing as a key advantage, minimizing the impact of mistakes. Drawdown limits: Using them as a framework to manage gold's potential volatility.
Gold's demand is increasingly influenced by official-sector accumulation and ETF dynamics , while remaining closely tied to real yields . For market participants, the focus should be on recognizing transitional market phases and managing exposure with a framework designed to endure volatility.
Based on reporting by TechBullion.