China added 740,000 ounces of gold in September

Gold opened on Monday at $4,191.

That is $4 below Friday's close, at the end of gold's first weekly gain in three weeks, in a week when the Fed's own minutes kept a December hike on the table. Overnight it traded above $4,200, and early this morning it was near $4,183.

Last week

On Wednesday the minutes of the Fed's September meeting showed that "most participants" think another hike "would likely be appropriate by year end." The 10-year Treasury yield touched 5.36% that day, and gold fell 1.28% on the day after trading as low as $4,066, its lowest since 5 August.

From Thursday the pressure eased: a strong 30-year Treasury auction pulled yields back from their morning highs, and on Friday gold rose 1.44%, helped by a softer dollar, a weak University of Michigan sentiment reading of 46.3 and President Trump's pledge that the US "will not be attacking Iran" before the 3 November midterms. The 10-year closed the week at 5.24%, down from 5.31% on Monday, and gold closed Friday at $4,194.46, up 1.24% on the week.

Week 5 to 9 Oct

+1.24%

Close Fri 9 Oct

$4,194

Low Wed 7 Oct

$4,066.06

High Fri 9 Oct

$4,207.69

One number that sat behind the week: 740,000 ounces. That is how much gold China's central bank added in September, according to official figures out on Wednesday: its biggest month since September 2023, and its 23rd in a row. It bought in a month when gold fell 8.5%, by the World Gold Council's count.

Week ahead

This week brings September's US inflation figures, and Fed Chair Kevin Warsh's last scheduled appearance before the Fed goes quiet ahead of its 27 to 28 October meeting.

• Mon 12 OctColumbus Day. The US bond market is closed, while gold and US stocks trade. The IMF and World Bank Annual Meetings open in Bangkok, and the IMF's World Economic Outlook is out at 10:00 p.m. ET
• Wed 14 OctSeptember CPI, 8:30 ET. August was 3.4%, with core at 2.4%, and Continuum Economics expects headline inflation to "bounce to 3.7%" with core unchanged. The Fed's Beige Book follows at 2:00 ET
• Thu 15 OctRetail sales and producer prices for September, 8:30 ET. At 11:30 p.m. ET, Fed Chair Kevin Warsh talks with the IMF's Kristalina Georgieva in Bangkok
• Fri 16 OctIndustrial production, 9:15 ET. It is the last day Fed officials can talk about policy in public before the meeting, as the quiet period starts at midnight
• Sun 18 OctChina's third-quarter GDP and September activity data, 10:00 p.m. ET (Monday morning in Beijing)
• Wed 28 OctLater this month: the Fed's decision, 2:00 ET

What is still running underneath all of it:

December is still the date. Futures put a 17.7% chance on a hike this month and 84.1% on one in December. Fed Governor Christopher Waller said on Thursday that he expects "additional hikes," but that "the hikes do not need to come at consecutive meetings," and he noted that 16 of the 18 officials who submitted forecasts in September pencilled in at least one more this year.

Oil is back above $104. A tanker was hit off Qatar on Wednesday, Brent settled 4.1% higher at $104.28 on Thursday, and Iran's Revolutionary Guards now say they "have taken control of the administration of the strait." Near-term strike fears eased on Friday, but Al Jazeera reports that "no breakthrough is expected in the coming weeks" before the midterms.

The analysts came back. In Kitco's Wall Street survey, 3 of 13 analysts expected gold higher on 2 October, and 7 of 14 did on Friday. Forex.com's James Stanley sees "mounting evidence that gold is continuing to see buyers show at or around the $4k level."

From Goldfish

On Friday, the record quarter for tokenized gold, and why most of the growth wasn't the price.

Tokenized gold gained nearly 120,000 holders between July and September, three times as many as in any prior quarter, pushing the total past 337,000.

Over the same three months, the value held in tokenized gold rose 12% to more than $5 billion.

Gold itself was up only about 4%, most of the growth came from buyers adding more gold on-chain, rather than chasing the price.

Read on X

On Wednesday, what gold funds did in September while the price fell.

Gold fell more than 8% in September.

Despite the drawdown, global gold ETF inflows reached 70 tonnes.

The World Gold Council says it has never seen price losses and ETF inflows of this magnitude in the same month.

Investors use ETFs to scale up gold allocations when volatility rises across stocks and bonds, cushioning portfolios during sharper equity drawdowns.

With gold down and ETF inflows up, September showed that short-term selling pressure can coexist with investors continuing to build long-term gold positions.

Read on X

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