Gold Finds Its Footing as Asian Buyers Step In, but the Fed Still Calls the Tune
Published on 10/26/2026 at 20:40 | Editorial boerse-global.de
Gold is trying to dig in after its sharpest weekly slide since June, and the recovery is being powered less by Western speculators than by buyers in Asia and by central banks that keep adding to their reserves. The metal fell 3.6% over the trading week through Friday, and on Monday the spot price was quoted at $4,012.77 an ounce, up 0.4% on the day. A separate quote later in the session put the gain at 0.6%, to $4,019.59.
The rebound has a clear catalyst: cheaper crude. According to Reuters, falling oil prices have taken some of the sting out of the inflation worries that had been weighing on bullion. It is the same chain of cause and effect that worked against gold earlier in the week, now running in reverse. On Wednesday, Reuters had attributed gold's fourth straight decline to rising oil prices and mounting inflation concerns, compounded by a firmer dollar and expectations of a tighter Federal Reserve stance. The run-up in crude was tied to escalating tensions in the Middle East.
A physical bid emerges in India and China
Support is also coming from the physical market. Kavita Chacko of the World Gold Council reports that Indian discounts narrowed sharply — from an average of $66 an ounce in September to $8 an ounce by October 16 — as seasonal demand picked up.
Central banks are doing their part. World Gold Council data show the People's Bank of China added 23 tonnes to its reserves in September, bringing its third-quarter purchases to 63 tonnes. Goldman Sachs analysts estimate that central banks worldwide bought 79 tonnes in August, far above the roughly 17-tonne monthly average before 2022.
Speculators have already trimmed their bets
The futures market tells a more cautious story. CFTC data for the week to October 20 show the net long position of non-commercial traders fell by 8,014 to 199,865 contracts. Longs still dominate, but the reduction shows that speculative money has been pulling back. Reuters noted that repositioning ahead of the central bank meeting could cap gold's upside.
Should investors sell immediately? Or is it worth buying Gold?
Selling pressure has come from an unexpected quarter as well. Media reports said investors sold gold on Thursday to meet margin calls after a technology-driven equity selloff — a reminder that gold can be a source of cash rather than a haven when portfolios need shoring up.
Forecasters turn more sober
The analyst community is split. A survey published Friday found 41% expecting further losses this week, 24% looking for gains and 35% seeing a sideways move or no clear direction. The poll captures short-term sentiment rather than a bank forecast.
CIBC Capital Markets offered a harder signal on Wednesday, when analysts Anita Soni and Cosmos Chiu cut their fourth-quarter 2026 target to $4,500 an ounce from $6,500 previously. They cited high energy prices, a more restrictive Fed, higher real rates and a stronger dollar. Cheaper oil removes one headwind, not the whole backdrop.
At current levels, gold sits about 28% below its 52-week high of $5,598.58 an ounce. ETF flows remain a bright spot: the World Gold Council reported roughly $10 billion in net global inflows to gold-backed funds in September, lifting holdings to 4,256 tonnes.
A longer-term demand shift is under way
Beyond the rate cycle, the World Gold Council sees structural change coming through digital channels. In a report on digital gold products, it estimated that digital instruments could generate around $95 billion in additional demand by 2031 under a base-case scenario.
Two dates now anchor the near-term outlook: the Fed's policy meeting on October 27–28 and the release of the US PCE inflation measure on October 29. A durable recovery would need the easing in oil to feed through to inflation and rate expectations. Monday's bounce on its own does not prove that has happened.
Ad
Gold Stock: New Analysis - 26 October
Fresh Gold information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
