Gold's Worst Session in Weeks Exposes a Two-Sided Market: Inflation Fear on One Side, Chinese Buying on the Other
Published on 10/31/2026 at 18:01 | Editorial boerse-global.de
Gold took a 3.6% hit yesterday as a triple front of rising crude prices, stubborn US inflation and surprisingly robust economic data hardened expectations that the Federal Reserve could lift rates in December. Higher borrowing costs erode the appeal of a metal that pays no yield, and traders wasted little time repricing that risk.
The pressure built through the week rather than arriving in a single shock. Monday had seen bullion advance, with softer oil prices easing inflation anxiety ahead of the Fed's midweek gathering. That tailwind reversed as crude turned higher, and the mood darkened further once the central bank left rates unchanged on Wednesday while noting that inflation remained elevated. A December hike stayed firmly in the market conversation — as an expectation, not a confirmed plan.
Hormuz Attack and Hot Data Add Fuel
Reuters reported that supply fears following an attack on a tanker in the Strait of Hormuz pushed crude higher, feeding directly into the inflation-and-rates channel that has become gold's dominant driver. Stronger-than-expected US gross domestic product figures landed alongside the energy move, compounding the sense that policymakers may have room to tighten again.
The inflation numbers themselves did little to calm nerves. The PCE price index climbed 0.5% in September from the prior month and 3.6% year on year, according to the U.S. Bureau of Economic Analysis. Stripping out the volatile food and energy components, the core measure rose 0.3% month on month and 3.1% annually — evidence that price pressure is broadening beyond the categories central bankers typically look past.
Should investors sell immediately? Or is it worth buying Gold?
ETF Flows Flip, and Europe Joins the Fray
Fund data added a second layer to the bearish case. BMO figures showed global gold ETFs posting net outflows of $1.1 billion in the week through 23 October, ending a three-month run of net inflows, with North America accounting for the bulk of the withdrawals. That snapshot covers a different window than Friday's selloff and does not by itself explain the session's losses, but it signals that the earlier wave of fund demand has stalled.
The rate debate was not confined to Washington. Inflation readings in the eurozone stoked speculation about a possible ECB hike in December, and the Börsen-Zeitung reported that firmer rate expectations weighed on both gold and silver. The retreat, in other words, cannot be pinned on the Fed alone.
Forecasts Trimmed, but Demand Holds a Floor
Analysts had already been shading their outlooks. A Reuters poll published Tuesday put the median 2026 gold price forecast at $4,495 per troy ounce, down from $4,509 three months earlier. Respondents flagged elevated US Treasury yields, a firm dollar and the prospect of rates staying high for longer as headwinds, while central bank purchases and physical demand were cited as supports.
Gold at a turning point? This analysis reveals what investors need to know now.
Those supports are not merely theoretical. Chinese net gold imports via Hong Kong jumped more than 28% in September from August, reaching their highest level in five months, according to figures released Thursday. Yet the stronger physical appetite proved no match for the macro tide — yesterday, inflation worry and the rate expectations it breeds carried the day.
Ad
Gold Stock: New Analysis - 31 October
Fresh Gold information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
