Gold Defies Rate Hikes with Bullish Signals Across Multiple Fronts

The Federal Reserve hiked interest rates on September 16, and two days later, the Bank of Japan followed suit. The moves were expected to put downward pressure on gold prices, but instead, several key stories emerged that point to a different outcome.

Goldman Sachs still holds its $5,400-an-ounce end-2027 forecast intact despite the Fed's 25-basis-point hike to 3.75%-4.00%. The bank sees central banks buying near 91 tonnes of gold a month and call-option demand running at roughly three times its historical average.

Venezuela is planning to move $4 billion in gold reserves from London to New York, with custody being the main issue rather than ownership. China's holdings of U.S. Treasuries have fallen to about $618 billion, down from a peak of $1.3 trillion in 2013.

Hong Kong is committing to a bigger role in gold trading, adding new yuan-denominated physically settled gold futures contracts and exploring growing its own Exchange Fund gold reserves.