Gold's Demand Base Is Broadening Even as Prices Slip Below $4,000
Published on 10/25/2026 at 12:10 | Editorial boerse-global.de
Gold closed Friday at $3,997.48 an ounce, dipping under the closely watched $4,000 line for the first time since mid-July and logging its steepest weekly loss in more than four months. Yet the same week brought a string of demand signals — from Beijing, from Indian buyers and from exchange-traded funds — that point in the opposite direction. The split between who is buying the metal and where the price is heading has rarely been sharper.
Oil, inflation and the rate calculus
The trigger for the selloff came from energy markets. Houthi attacks in Saudi Arabia stoked fears of supply disruptions and drove crude higher, fanning inflation worries that Reuters had already flagged on Thursday as a drag on bullion. The market's reading was straightforward: rising oil reinforces expectations that US interest rates stay elevated for longer, a hostile backdrop for a metal that pays no yield. Safe-haven bids met a rate environment working against them.
That makes the Federal Reserve's next policy meeting on 27–28 October 2026 the key calendar marker. Traders are watching for any signal on the US rate path, and the recent weakness is best understood less as a demand problem than as a tussle between physical buying and monetary-policy expectations.
Speculators head for the exits
Positioning data underscored the caution. Friday's CFTC report showed large speculators holding 199,865 net-long contracts in gold futures as of Tuesday, down 8,014 from the prior week. Bulls still outnumber bears, but the retreat shows this cohort turning more defensive. Crucially, the figures capture futures positioning only, not overall gold demand — which is why they sit comfortably alongside continued official-sector buying rather than contradicting it.
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China turns buyer again
On the other side of the ledger, China's central bank stepped up purchases sharply. The World Gold Council reported on 15 October that the People's Bank of China added 23 tonnes in September, its largest monthly increase since October 2023. Third-quarter buying totaled 63 tonnes, taking official reserves to 2,410 tonnes — evidence the demand was not a one-month blip.
Those purchases are a concrete counterweight to the speculative pullback, though they offer no hard floor under the price. The recent tape shows plainly that different buyer groups can pull the market in opposite directions at once.
India's festive season lends a hand
Indian demand added its own support. The World Gold Council reported on Tuesday that the country's gold market was stirring ahead of the festival and wedding season, with lower prices encouraging seasonal buying. Indian gold ETFs attracted estimated net inflows of 17.22 billion rupees in the first half of October. Neither stream, however, was enough to arrest the price decline.
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Estimates on official-sector activity worldwide were also constructive. On 19 October, Goldman Sachs put global central bank purchases at 79 tonnes for August, with seasonally adjusted buying running at 85 tonnes a month on a three-month basis. Those are Goldman's estimates, not official World Gold Council figures — a distinction worth keeping in mind.
The next data point
What matters now is not simply the next swing in speculative positioning but whether Chinese and central bank demand keeps offsetting selling pressure. The World Gold Council's next "Gold Demand Trends" report, due 3 November, will break down global demand including China in detail. Until then, one distinction should anchor any reading of this market: softer futures positioning does not mean official demand is fading — and robust central bank buying, for its part, guarantees nothing about short-term price stability.
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