Gold Pulls Back, but the World's Biggest Buyers Are Still Accumulating

Precious metals came under pressure over the past week as investors rotated back into risk assets, with gold, silver and platinum all finishing lower. Gold fell 1.3% to USD $4,288 per troy ounce (oz), while silver slipped 1.5% to USD $64.42oz. Platinum also eased 1.1% from recent highs, trading at USD $1,755oz at the time of writing.

The weakness in safe-haven assets contrasted sharply with strong gains elsewhere. Global equities extended their rally, with the ASX 200 rising 0.8% and the S&P 500 gaining 2.0% week-on-week. Bitcoin was the standout performer, surging 11% over the week and reinforcing the market's appetite for higher-risk assets.

Meanwhile, energy markets moved in the opposite direction, with Crude oil WTI futures falling 10% to USD $92/bbl. The sharp decline in crude helped ease some inflation concerns and supported broader risk assets, although lower energy prices have so far done little to reignite interest in precious metals.

Last Wednesday, the Federal Reserve raised interest rates 25bp to 3.75-4.00%, the first increase by the central bank since 2023. This decision was led by Fed Chair Kevin Warsh and backed by a unanimous vote by policy makers. Energy shocks from the ongoing conflict with Iran, high inflation and strong economic growth and hiring trends were major contributors to this decision (Fed Reserve). At the time of writing, markets are pricing in a ~70% and 94% probability of another 25bps rate hike in the October and December meetings respectively (CME Group).

Bond markets remained a key focus for precious metals investors over the past week, with long-dated sovereign yields continuing to push higher across several major economies. US Treasury yields rose further, with both the 10-year (5.11%) and 30-year (5.40%) benchmarks remaining near a 20-year high as investors demanded greater compensation for holding government debt amid persistent fiscal concerns and expectations that interest rates will remain elevated (US Treasury). Similar moves were seen across Australia, Europe, the UK and Japan, where long-term yields also trended higher as government borrowing requirements increased and inflation concerns lingered.

Historically, rising bond yields can act as a headwind for gold, as higher returns on fixed-income assets increase the opportunity cost of holding a non-yielding asset. This dynamic likely contributed to some of the weakness seen across precious metals this week. However, the relationship is not always straightforward. Recent years have demonstrated that gold can remain resilient during periods of rising yields when investors view higher borrowing costs as a symptom of deteriorating fiscal conditions, growing debt burdens (US national debt approaching USD $40.2 trillion at a 122% debt to GDP) and concerns over long-term currency debasement.

ETF demand continues to be one of the key structural pillars underpinning the gold market. Month-to-date, global gold ETFs have attracted approximately 65 tonnes of net inflows, led by North American funds (31 tonnes) and European-listed ETFs (20 tonnes). This follows a particularly strong August, when ETF investors added more than 120 tonnes of gold, marking the largest monthly inflow since the surge in investor enthusiasm during January, when gold briefly peaked around USD $5,600oz.

While year-to-date net inflows of 159 tonnes remain well below the exceptional 803 tonnes recorded over 2025, they still represent the second-strongest calendar year for ETF buying since 2020. Importantly, sustained ETF accumulation highlights that institutional and retail investors continue to view gold as an attractive portfolio diversifier and hedge against economic, fiscal and geopolitical uncertainty.

Across the Asian market, Chinese gold imports have reached record levels, surpassing 1000 tonnes in the 9 months of the year. This accumulation accounts for ~4% of the country’s total foreign exchange reserves (Royal Mint). Chinese gold ETFs added another 44 tonnes in August, reflecting an 18% increase since the beginning of the year (Yahoo Finance), with another 20 tonnes purchased so far in September. Sanction protection, reserve diversification, the domestic real estate and stock slump have driven this demand, with both the bank and everyday investors turning to the asset as a safe-haven.

This uptrend of gold in central bank compositions is not limited to China and has been seen globally, particularly since 2022. Central Banks are set to finish the year with strong net purchases in the realm of 700-800 tonnes. This reflects a growing desire to diversify reserve holdings, enhance portfolio resilience during periods of crisis, and protect against geopolitical tensions, financial instability, and the potential erosion of fiat currency purchasing power.

This positive sentiment is still in place, with the World Gold Council’s June 2026 Survey of 76 central bank participants revealing that 78% of central banks reported moderately higher gold reserves in 5 years from now, up 46% since 2022. 45% of these participants also plan to buy gold in the coming 12 months, a record high for this survey (WGC).

Until next time,

Jordan Eliseo
General Manager, ABC Bullion

Luke Tyler
Senior Analyst, ABC Bullion

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