1. Central BanksCentral banks (like the U.S. Federal Reserve, the European Central Bank, or the People’s Bank of China) often buy physical gold for their national reserves.
They do this to diversify away from currencies (especially the U.S. dollar) and to protect against inflation or financial instability.
Example: When the global economy looks uncertain, central banks tend to increase gold holdings — this raises gold’s demand.
2. Commercial Banks & Investment BanksLarge banks like J.P. Morgan, Goldman Sachs, HSBC, etc. trade gold futures, options, and spot gold to make profit or to hedge client positions.
They can buy or sell depending on their trading strategies or clients’ needs.
Example: If clients are buying a lot of gold ETFs, the bank might hedge by buying in the spot or futures market.
3. Institutional InvestorsThese include hedge funds, pension funds, mutual funds, and ETFs (like SPDR Gold Trust - GLD).
They buy gold when they expect:
Inflation to rise
The U.S. dollar to weaken
Geopolitical risk to increase
Or simply to diversify portfolios
4. Retail Traders (like you and me)On Forex brokers (e.g., XAU/USD), the “gold” you trade is usually a CFD (Contract for Difference) — not physical gold.
Retail traders buy when they expect the gold price to rise against the USD.
Collectively, retail flow adds liquidity but has less influence compared to big institutions.
5. Jewelry & Physical DemandCountries like India and China are huge buyers of physical gold for jewelry and investment purposes, especially during wedding and festival seasons.
This type of demand also supports prices in the long term.
Support = Demand Zone = Buyers’ area
Resistance = Supply Zone = Sellers’ area
