Gold (XAU/USD) is approaching $4,200 as investors await the upcoming US Consumer Price Index (CPI) report. Analysts are divided on whether the recent rally signals a deeper shift in the monetary landscape or merely a corrective bounce within a broader downtrend.
Samuel Briggs of Kinesis Money argues that central banks are quietly repricing gold against the US Dollar (USD). He notes that central banks are accumulating physical gold at an unprecedented rate, surpassing US Treasuries as the world's top reserve asset. Briggs believes the Fed's outdated valuation of gold at $42 an ounce is leading to real-time revaluations of sovereign balance sheets, with buyers absorbing the current dip.
Mike Maharrey of Money Metals Exchange highlights record inflows into gold-backed ETFs. Despite rising yields, global holdings rose by 67.3 tonnes in September, reaching a record 4,256 tonnes. The World Gold Council reported that Q3 inflows totaled 211 tonnes, worth $31 billion, reversing earlier weaknesses. Buying was strong across North America, the UK, and China.
Dhwani Mehta of FXStreet offers a technical perspective, cautioning that gold's recovery remains capped. The daily chart shows gold below key moving averages, with the 100-day SMA at $4,259.87, the 50-day SMA at $4,334.80, and the 200-day SMA at $4,529.19. The RSI around 44 leans slightly negative, and the rising trend-line support near $4,001 is critical for maintaining the recovery.
The upcoming CPI report will be pivotal, as it could influence the Federal Reserve's decision on a December rate hike and the sustainability of gold's bounce.