Gold Price Slumps Amid Rising Real Yields and Slow Central Bank Demand
The gold price has been a topic of much discussion in recent months, with many predicting it will reach $10,000 an ounce. However, according to data from September 26, 2026, spot gold is currently trading at $4,286.20 per troy ounce, which is 20.7% below the record LBMA Gold Price PM auction fix of $5,405.00 set on January 29, 2026.
The decline in gold prices is largely due to the rise in real yields, which have reached their highest level since November 2008 at 2.85%. This has made holding gold a less attractive option for investors, as it pays no coupon and its opportunity cost is whatever a risk-free inflation-linked bond yields.
Despite this, central banks continue to purchase large amounts of gold, with the World Gold Council reporting net purchases of 288.9 tonnes in Q2 2026. However, this is still lower than the first half of 2025 and the lowest since 2022. The composition of these purchases also matters, with some countries, such as China, continuing to buy large amounts of gold while others, like Turkey, are selling.
The official bid for gold has an identifiable ceiling, according to Timur Ishmetov, Governor of the Central Bank of Uzbekistan, who said that while 'gold has turned out to be the best investment so far', the bank is looking at potential sales of gold at 'favourable prices' as part of its overall reserve management plan.