Gold is not just a commodity; it is a global referendum on confidence. When investors question the durability of growth, the stability of purchasing power, or the credibility of policy, gold becomes the asset that prices those doubts in real time.
In recent cycles, that “confidence premium” has been amplified by two structural forces: persistent central-bank accumulation and the ability of ETFs to convert macro anxiety into immediate, scalable demand. World Gold Council data also points to 2025 as a year of exceptionally strong gold ETF inflows, reinforcing how quickly investor positioning can shift when the narrative changes.
Gold’s Core Engine: Real Yields (Not Headlines)
Many variables touch gold—currency moves, geopolitics, liquidity, jewelry demand—but one driver repeatedly shows up as a powerful anchor: real yields (inflation-adjusted returns). When real yields rise, holding a non-yielding asset becomes relatively less attractive; when real yields fall (or investors expect them to), gold often finds stronger footing.
This relationship is not a mechanical on/off switch. It’s better viewed as the “gravity” of the gold market: other forces can overpower it for stretches, but over time it tends to reassert itself.
Central Banks: The Slow-Moving Bid That Matters
Central banks operate on a different clock than speculative money. Their activity can create a durable baseline of demand because it is often tied to reserve diversification and long-horizon risk management, rather than short-term price targets.
Two signals from the World Gold Council are particularly telling:
- In its Central Bank Gold Reserves Survey 2025, 95% of respondents expected global central-bank gold reserves to increase over the following 12 months, and a record 43% expected their own reserves to rise.
- The WGC also notes that 2023 central-bank purchases were 1,037 tonnes, one of the largest annual totals on record, following 2022’s record level.
For market structure, this matters because central-bank demand is typically less price-sensitive than retail buying and often persists through volatility.
ETFs: The Fast Channel That Can Reprice Gold Quickly
If central banks are the slow tide, ETFs are the fast current.
World Gold Council reporting for December 2025 highlights that 2025 saw the strongest year of global gold ETF inflows on record, with ETF assets under management more than doubling and holdings reaching record highs.
That combination—steady official-sector accumulation plus rapid ETF transmission—helps explain why gold can “gap” into new regimes rather than climb in neat steps. When positioning flips, it can flip hard.
How the Gold Price Gets “Stamped” Each Day
Understanding pricing mechanics helps separate signal from noise. A key global reference is the LBMA Gold Price, which is set via an electronic auction twice daily in London and is administered by ICE Benchmark Administration (IBA). The benchmark is designed to be tradeable and auditable under IOSCO principles.
That benchmark ecosystem—spot, futures, OTC liquidity, ETF creation/redemption—creates multiple pathways for flows to impact price, sometimes simultaneously.
A Practical Signal Checklist for the Next Gold Move
A market analyst looking for tradable clarity usually watches a small set of repeatable indicators rather than a long list of narratives. A disciplined gold checklist can include:
- Direction of real yields: not only the level, but whether the market is repricing the path.
- ETF flow persistence: one-off spikes matter less than multi-week consistency.
- Central-bank tone and reported additions: the “baseline bid” becomes more influential when speculative positioning is crowded.
- Dollar trend vs. gold trend: divergence can reveal whether the market is trading “currency” or “confidence.”
- Volatility regime shifts: rising implied volatility often signals uncertainty is becoming tradable demand, not just commentary.
Where Axel Fabela Iturbe’s Framework Fits
Axel Fabela Iturbe’s background—trained in finance at the University of Chicago and shaped by early career work in market trend analysis and risk assessment at Morgan Stanley—naturally lends itself to rule-based decision-making over narrative chasing.
In his public-facing methodology, he emphasizes trend identification and risk control (intelligent control trend), paired with a more systematic, repeatable approach to position sizing and capital allocation through an algorithmic “quantitative capital system.” The practical implication for the gold market is straightforward:
- Let the market confirm direction (trend first, story second).
- Treat sizing as the primary edge (small mistakes survive; oversized mistakes compound).
- Use drawdown limits as structure (gold can trend powerfully, but it can also snap back when real-yield expectations shift).
Bottom Line
Gold is increasingly driven by two demand engines—official-sector accumulation and ETF flow dynamics—while still orbiting the gravitational pull of real yields.
For analysts and participants, the edge is rarely predicting a single headline. It is recognizing when the market is transitioning from “range-bound valuation” to “confidence repricing”—and managing exposure with a framework built to survive volatility, not fear it.
