Central Banks' Gold Buying Spree Sets Stage for Precious Metal Rally
A recent report from Vallum Capital suggests that gold and silver are poised for significant gains due to the impact of fiscal dominance and shifting real yields on the macro-outlook.
The report notes that a 2% real yield threshold and a reversing Dollar Index are structural markers, signaling a durable reversal rather than just a chart pattern.
The US Federal Reserve's actions have been 'structurally boxed in', with either raising interest rates or holding the line leaving real rates negative at the front end, while CPI remains above target. This situation is seen as leading to debasement of the currency, which gold has correctly priced through every prior cycle.
The report also highlights that central banks have been buying large amounts of gold, with 288.9 tonnes purchased in the second quarter of 2026 - a 411% surge quarter-on-quarter. In contrast, Western ETF outflows reached 44.8 tonnes and jewellery demand fell 17%.