DBT Bureau
Pune, 8 Oct 2026
Gold prices came under pressure in September as higher U.S. interest rates and elevated Treasury yields reduced the appeal of the non-yielding precious metal. According to Kedia Advisory’s October 2026 Gold Monthly Outlook, gold fell 6.5% in September to settle at around $4,156 an ounce, near the month’s low.
The pressure on gold has been linked to tighter U.S. monetary policy. The Federal Reserve raised its policy rate by 25 basis points in September to a range of 3.75%-4.00%, while inflation remained elevated. Treasury yields also stayed high, with the 10-year and 30-year yields at 5.26% and 5.59%, respectively, on September 29. Higher bond yields can reduce the attractiveness of gold, which does not generate regular income.
Kedia Advisory noted that sticky inflation is keeping the Federal Reserve’s policy bias firm. Headline PCE inflation stood at 3.4% year-on-year in August, while core PCE inflation was at 3.0%. The firm said persistent inflation remains a headwind for a quick recovery in gold prices.
However, continued central-bank buying is providing support to the gold market. Central banks purchased 289 tonnes of gold in Q2 2026, up 62% year-on-year. Steady official-sector buying is helping underpin the $3,960-$4,000 support zone.
Investor flows remain mixed. Global gold ETF outflows reached about $4 billion in Q2, while North American ETFs recorded a 61-tonne outflow in the first half of 2026. In contrast, Indian bar and coin demand rose 9% to 50.3 tonnes, while strong Asian over-the-counter buying provided additional support.
On the technical front, gold’s weekly structure has weakened, although the long-term bullish trend remains intact. Gold was trading below its 12-month average of $4,464, while the $4,110-$4,320 zone has emerged as an important range for the next move. A weekly close above $4,320 could strengthen the recovery towards $4,880, while a break below $4,110 could open the way towards $3,940.
Gold is at a make-or-break point, with higher rates weighing on prices while central-bank purchases continue to provide a floor.
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