Gold Steadies Near $4,135 as Official Buyers and Rate Fears Pull in Opposite Directions
Published on 10/22/2026 at 04:10 | Editorial boerse-global.de
Gold is ending a four-session losing streak, but the metal's modest rebound says more about the tug-of-war between official-sector demand and monetary policy than about any genuine turn in sentiment. Spot bullion settled at 4,135.51 USD per fine ounce, a gain of 0.3% on the day, after touching its weakest level since October 15.
The pressure has not come from a single session. A firmer US dollar and rising Treasury yields weighed on prices as early as Monday, according to Reuters. More recently, the spike in crude prices — driven by escalating tensions in the Middle East and the risk of supply disruptions — has fanned inflation worries and hardened expectations that the Federal Reserve will keep tightening. That combination has hit gold through the rate channel rather than through physical demand.
Why geopolitics is working against the metal
Ordinarily, Middle East unrest would send investors rushing into safe havens. This time the transmission mechanism runs the other way: costlier energy feeds inflation, inflation feeds rate-hike bets, and higher rates raise the opportunity cost of holding a non-yielding asset. The geopolitical risk premium is being expressed through oil and yields, not through bullion.
Against that, central banks are buying at a pace not seen in nearly a year. Preliminary figures compiled from central-bank and IMF data show roughly 63 tonnes of net official purchases in September, the largest monthly total since November 2024, as reported by the Financial Times. The People's Bank of China accounted for 23 tonnes of that — its biggest single-month addition since October 2023, according to World Gold Council data released on October 16.
Should investors sell immediately? Or is it worth buying Gold?
Fund flows tell a similar story. Global gold ETFs drew net inflows of 10 billion USD in September, and the World Gold Council put third-quarter inflows at a record 31 billion USD. Indian demand added its own support: the World Gold Council reported yesterday that seasonal jewellery and investment buying picked up in October, helped by the festive and wedding calendar and positive fund flows. Yet the picture is not uniform — Indian gold imports fell sharply in September.
The calendar that matters now
Two dates sit at the center of the debate. The Federal Open Market Committee meets on October 27–28, and market participants will parse the statement for any signal on the future path of rates. Reuters also flags the upcoming US PCE report as the next key read on the inflation trajectory.
Neither event comes with a preordained outcome. For investors, the takeaway is that the drag from energy-driven inflation and the support from official and fund buying should be assessed separately rather than blended into a single narrative. The September reserve purchases document demand for the metal; they do not show that oil-price and rate concerns have been resolved.
Gold at a turning point? This analysis reveals what investors need to know now.
That distinction is the crux. Central-bank accumulation and ETF inflows underpin the longer-term case for gold. Whether prices can build on today's stabilization depends largely on whether the coming inflation and Fed signals soften or confirm expectations of further tightening. Yesterday's flat close — 4,134.08 USD per ounce — and today's small advance interrupt the decline, but they do not yet amount to a durable reversal.
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