Chinese Buying Hits a Five-Month High, but the Fed Still Sets Gold's Direction
Published on 10/29/2026 at 13:12 | Editorial boerse-global.de
Gold's physical demand story got a fresh boost on Tuesday, with Chinese net imports through Hong Kong climbing more than 28% in September from August to reach a five-month high. Yet the metal is heading for a second consecutive monthly decline, and the buyers stepping up in Asia are not the force currently dictating the price.
Spot gold settled at $4,033.63 an ounce, down 0.8% on the day, as a firmer dollar and elevated US Treasury yields kept the pressure on. The stronger Chinese figures were not enough to shield the metal from monetary-policy worries that have taken centre stage.
A Policy Hold That Offered No Comfort
The Federal Reserve left its benchmark rate unchanged yesterday. Two members pushed for an increase. Chair Kevin Warsh gave no clear signal on the next move, pointing to further economic data instead — so the pause did nothing to reassure bullion investors.
Traders were pricing roughly an 80% probability of a December rate hike via CME FedWatch, according to Reuters. The US PCE price index for September, released today by the Bureau of Economic Analysis, was the session's focal point. The gauge is the Fed's preferred inflation measure, and persistent price pressure could cement expectations of further tightening.
Should investors sell immediately? Or is it worth buying Gold?
The distinction between a possibility and a decision matters here. A December increase is not a done deal, and today's data can shape expectations for the rate path without making the central bank's choice for it.
Oil and Yields Add to the Inflation Mix
Reuters reported yesterday on an additional inflation impulse from the oil market: Brent rose more than 1% after an attack on a Saudi refinery, while long-term US yields climbed in tandem. Warsh stressed the central bank's readiness to act. Together with costlier crude, that explains why geopolitical uncertainty has not simply driven investors into gold as a safe haven — inflation and rate concerns have outweighed that bid in recent trading.
Official Buyers Are Still Buying
Against that backdrop, central bank purchases offer a counterweight. The World Gold Council reported on 15 October that the People's Bank of China added 23 tonnes in September, taking third-quarter purchases to 63 tonnes. Goldman Sachs, meanwhile, estimates total central bank buying at 79 tonnes in August, of which it attributes 25 tonnes to China — a monthly total the bank reckons was nearly five times the pre-2022 average.
Those figures are backward-looking. They document purchases in earlier months rather than an imminent turning point for prices, and they cover a different slice of demand from the import data. Taken together, though, they make clear that the recent price weakness should not be read as a general disappearance of physical buyers.
Gold at a turning point? This analysis reveals what investors need to know now.
A Mixed Picture on the Ground
Physical demand is not telling a single story. The World Gold Council reported on 20 October that Indian gold imports fell sharply in September, and it has flagged its next gold demand report for early November. The import numbers and the central bank estimates, while pointing in the same general direction, concern separate demand segments.
For investors, the takeaway is a split horizon. Chinese and official-sector purchases point to a genuine base of physical demand. In the near term, though, US rate expectations dominate. Until that headwind eases, stronger import figures on their own are not a reliable signal of recovery.
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