Central Banks Keep Stockpiling Gold Even as Rising Yields Weigh on Prices
Published on 09/26/2026 at 19:41 | Editorial boerse-global.de
Gold finished the week at $4,288.69 an ounce, a modest 0.5% gain on Friday that did little to disguise a bruising month for the metal. Over the past 30 days, bullion has shed 6.7%, pressured by a sharp climb in long-dated US Treasury yields and mounting expectations that the Federal Reserve will keep policy tight for longer. Even so, gold still commands a 14% gain over the past twelve months.
The immediate trigger for the recent softness came from the US economic data flow. Resilient business activity and stubborn price pressures convinced traders that the Fed may have to tighten further, lifting real yields and burnishing the appeal of dollar-denominated fixed income at the expense of a metal that pays no coupon. A rocket attack on facilities in Saudi Arabia on Thursday added to the nervousness, pushing oil prices higher and reinforcing existing inflation concerns. Hopes of diplomatic progress toward a US-Iran agreement briefly calmed sentiment, according to media reports, but the respite proved short-lived.
Positioning data laid bare the shift in mood. Figures from the US Commodity Futures Trading Commission showed non-commercial accounts at COMEX trimming their exposure, with long contracts falling to 253,982 as of September 22 while shorts edged up to 28,129. Within the managed money category, net longs stood at 127,389 contracts.
UBS acknowledged the headwinds on Wednesday, noting that the Fed's latest rate hike is keeping real yields and the dollar elevated and weighing on gold in the near term. Still, the Swiss bank maintained that this pressure does not undermine its strategically positive, longer-term view of the metal.
Should investors sell immediately? Or is it worth buying Gold?
Official-Sector Demand Tells a Different Story
While speculative money retreats, the world's monetary authorities are moving in the opposite direction. Fresh data from the World Gold Council show central banks bought a net 23 tonnes in July, led by China with 20 tonnes and Poland with eight. The purchases serve as a hedge against inflation risks and geopolitical tensions, and China's import appetite has been just as striking: inbound shipments topped 1,000 tonnes between January and August.
Goldman Sachs expects that official-sector buying will average 50 tonnes a month this year, easing to 40 tonnes monthly in 2027 — a pace well above the historical norm seen before 2022. The US investment bank did nudge its short-term expectations lower after recent rate decisions, but its analysts stress that the structural upward momentum remains intact. Strategic diversification of state reserves, in their view, should cushion any outflows from private investment vehicles in the quarters ahead.
Asia's Physical Market Sends Mixed Signals
The picture on the ground in Asia is uneven. Swiss customs data for August show exports holding steady at 156.5 tonnes, with the bulk destined for the UK and China. India, by contrast, saw estimated gross imports slump 45% month-on-month to between 15 and 20 tonnes, as local supply was sufficient to meet demand for the time being.
Traders now turn their attention to the next batch of US economic releases. On Friday, October 2, the Bureau of Labor Statistics will publish its latest employment report, and the readings on hiring and wages should offer crucial clues about how much room the Federal Reserve has left to maneuver on interest rates.
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