Gold's Demand Puzzle: Indian Buyers Return While Energy Costs Call the Tune
Published on 10/25/2026 at 06:01 | Editorial boerse-global.de
Gold finished Friday at 3,997.48 USD an ounce, and the session told a story that has become familiar of late: the metal is no longer trading primarily off Treasury yields. ING analysts Warren Patterson and Ewa Manthey argued in a note the same day that the market is assigning greater weight to rising oil prices, with inflation and tightening concerns drowning out what would ordinarily be a supportive pull from falling US bond yields. Reuters framed the dynamic the same way on Friday.
The yield signal, in other words, has been overridden. A preliminary US purchasing managers' index for October, printed at 57.6, kept the dollar steady and, in ING's reading, blocked any rebound in bullion. That combination — cheaper government debt, a firm greenback, costlier crude — explains why the metal failed to find a floor even as equities sold off.
A regional bid builds
Against that macro backdrop, the physical side of the market is painting a different picture. The World Gold Council reported on Tuesday that seasonal demand in India is picking up ahead of the festival and wedding season, with dealers reporting healthier order books and restocking their inventories. At the same time, scrap gold exchange and informal inflows have been adding to domestic supply, keeping local premiums in check.
China's central bank, meanwhile, remains a steady buyer. According to the World Gold Council on 15 October, the People's Bank of China added 23 tonnes in September — its largest monthly purchase since October 2023.
Should investors sell immediately? Or is it worth buying Gold?
Those flows stand in contrast to the recent price weakness, but they have not been enough to turn the market. Demand is not moving in lockstep with the international quote everywhere, which is an important counter-signal for investors scanning for a bottom; it does not, however, amount to a global demand turnaround.
Swiss shipments show the same split
Trade flows reinforce the regional divergence. Swiss gold exports rose 6% month-on-month in September to 165.2 tonnes, of which 126.2 tonnes went to the UK. Shipments to China fell to 12.7 tonnes, and those to India dropped to 3.1 tonnes.
The export figures, released Tuesday, cover an earlier window than the latest Indian demand reports, so weaker September deliveries and a later seasonal revival need not contradict each other. Timing is the key to reading the two datasets side by side.
Crude as the swing factor
Energy has been the dominant force on the international market. Reuters reported that Houthi attacks on Saudi Arabia stoked fears of supply disruption, pushing oil up roughly 4% on Thursday to a five-month high. The resulting inflation and rate worries weighed on bullion, and combined with resilient US economic data, they explain why India's stronger seasonal demand has yet to deliver broad relief.
Gold at a turning point? This analysis reveals what investors need to know now.
The DZ BANK update of 16 October drew an explicit line between near-term headwinds and longer-run support: rising expectations for US rate hikes were labelled a drag, while persistent central bank buying was cast as a prop. The house projects roughly 4,300 USD an ounce by the end of 2026, 4,600 USD in the first half of 2027, and around 5,000 USD on a full-year view. Those are forecasts, and they rest on a recovery arriving later rather than an immediate end to selling pressure.
What to watch next
The near-term calendar offers two concrete tests. The Federal Reserve's policy meeting runs 27–28 October, with the rate decision and press conference on 28 October 2026, followed on 29 October 2026 by the US PCE price index — a key inflation gauge. For gold, physical demand and recovery hopes are meeting a market that is currently pricing inflation risk above all else. India's seasonal strength is a genuine positive; it is not yet a trend change.
Ad
Gold Stock: New Analysis - 25 October
Fresh Gold information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
