China's 23-Month Buying Streak Meets a Speculative Retreat: Gold's Split Personality
Published on 10/07/2026 at 14:21 | Editorial boerse-global.de
Chinese monetary authorities expanded their gold holdings by 740,000 ounces in September, the largest single-month addition in three years, lifting the People's Bank of China's reserves to 77.47 million ounces. It marks the 23rd consecutive month of accumulation in Beijing — a buying cadence that shows no sign of tapering even as Western traders trim their exposure.
That steady official-sector demand has become a fixture of the broader central-bank landscape. According to the World Gold Council, net sovereign purchases worldwide reached 39 tonnes in August, bringing the year-to-date total to 170 tonnes. China led the pack that month with 20 tonnes, followed by Poland and Uzbekistan at 8 tonnes each. This persistent institutional bid has served as a counterweight to the shifting rate expectations that dominate Western trading desks.
Spot Market Under Pressure
Despite the bullish signal from Asia, bullion changed hands lower on Wednesday. The spot price shed 1.1% to $4,117.52 an ounce as market participants held back ahead of key monetary-policy signals from Washington. The focal point is the release of the Federal Reserve's September meeting minutes, due Wednesday afternoon, which traders will scour for clues on whether the US central bank is contemplating further rate increases.
Thursday could bring additional direction once Chinese financial markets reopen after the National Day holiday week. Participants expect the resumption of trading in the Far East to reveal just how robust private and institutional appetite for the metal really is.
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The midweek softness follows a modest recovery on Tuesday, when gold snapped a sharp losing streak. The spot price closed 0.6% higher at $4,164.04 an ounce, helped by retreating US Treasury yields and a dollar that pulled back from a one-year high. Reuters reported that alongside easing rates, a flight-to-safety bid emerged as investors grew uneasy over strains in the French bond market and the US sovereign-debt arena. That combination checked selling pressure after 10- and 30-year Treasury yields had touched 24-year peaks earlier in the week.
A September Unlike Any Other
The recent turbulence came on the heels of a remarkable month. The World Gold Council described September's market action as extraordinary: global gold ETFs attracted inflows exceeding 70 tonnes, yet the dollar price of gold fell more than 8%.
The Council pins the divergence squarely on derivatives. At the COMEX, speculative funds slashed their positions — the Managed Money category shed 84 tonnes equivalent, while the Spreading category contracted by 156 tonnes equivalent. Those outsized futures-market rotations completely overwhelmed the buying interest in physically backed investment products.
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Payrolls Miss Adds Fundamental Support
On the macroeconomic front, US labour data offered some relief. The Labor Department reported that nonfarm payrolls grew by just 29,000 in September, against a Reuters poll of economists expecting 90,000. The wide miss stoked doubts about further rate moves and gave the metal a temporary lift, though it could not immediately offset the earlier rate-driven damage across capital markets.
Traders now turn their attention to Wednesday's Fed minutes, with further directional signals expected from Friday's CFTC positioning report and US consumer price data due October 14. Over the medium term, the metal remains 4.1% below its 50-day moving average.
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