298 Tons of Gold in ETFs Currently Below Cost Basis Level

Data tracking acquisition cost prices in gold ETFs indicates that around 298 tons of gold held in these funds are now trading at prices below the average purchase price of their unit holders, according to reports. This indicator is considered one of the key measures of corrective pressure on the yellow metal at the present stage.

The existence of these holdings "underwater" means that investors who entered at high prices during the previous rally are now facing unrealized losses, creating potential selling pressure if prices trend further downward. The longer prices remain below cost levels, the higher the likelihood of exit waves.

In the same context, some major gold funds are reviewing their strategies in light of the current interest rate environment, as the opportunity cost of holding gold has become higher than it was in recent years. Analysts note that this dynamic makes an immediate short-term rebound difficult for gold to achieve.

Conversely, optimists believe that this situation could form a solid floor on the other hand; the likelihood of triggering "stop-loss" orders at specific levels limits a sharp decline, and any geopolitical shock or weak economic data could turn these pressured positions into fuel for a swift rebound.

What do these terms mean?

"Underwater": An expression used by traders to describe any investment whose price has dropped below its original purchase price, meaning selling now realizes a loss. Stop-loss: An automatic sell order executed by an investor when the price reaches a specified level, to limit losses.