Gold Defies Rate Hike Trend Amid Central Bank Buying

Global central banks are signaling higher interest rates amid persistent inflation, which might seem like bad news for gold. However, gold has shown resilience in the face of rate hikes, thanks to factors such as central bank buying, geopolitical tensions, and rising debt levels.

Vandana Bharti, Head - Commodity Research at SMC Global Securities, notes that gold's historical performance during periods of rising interest rates is a positive indicator. She explains that despite higher borrowing costs, gold tends to hold its value or even increase in price.

The fourth quarter may see further support for precious metals from traditional festive buying across India, China, and Europe. This could lead to an uptick in prices as consumers turn to gold and silver as a store of value during holiday seasons.