Central bank purchases draw attention as gold prices continue to decline
While declining gold prices following September losses are pressured by US bond yields and Fed policies, central bank purchases led by China and Poland remain among the key factors limiting the decline.
The decline in gold prices has turned investors' focus toward the critical $4,000 threshold, while rising US bond yields and uncertainties regarding the Fed's interest rate policies continue to pressure the precious metal. During this process, central bank purchases led by China and Poland continue to provide support to the market.
September Losses and Price Levels
Gold prices experienced a loss of approximately 6 percent throughout September. Reaching its historic peak on January 12, 2026, the precious metal recently retreated to the range of $4,100 to $4,200, dropping to its lowest level in the last seven weeks.
Impact of Bond Yields and Fed Policies
The US 10-year Treasury yield hovering around 5.3 percent and 30-year yields peaking pressured gold. Statements by Fed officials indicating that interest rates could be raised if necessary and the ongoing fight against inflation strengthened the dollar, accelerating the decline.
Geopolitical Developments and Oil Market
The lack of progress in talks between the US and Iran and risks around the Strait of Hormuz caused fluctuations in oil prices. High oil prices increased inflation concerns, driving bond yields upward and pushing the positive impact of safe-haven demand into the background.
Central Bank Purchases and Critical Threshold
Central bank purchases, led by China and Poland, aim to reduce dependence on currencies in reserves. While institutions like Morgan Stanley also draw attention to private sector demand in Asia, the $4,000 level is being monitored as an important psychological and technical support zone.
Future Expectations and Approximate Dates
For the short-term decline in the markets to end, gold needs to rise above the $4,250 to $4,300 band. Investors are now focused on the US inflation data to be released on October 14 and the Fed meeting scheduled for October 27-28.