Gold Prices Stagnant Below $4300 Amid Rising Oil and Interest Rates
The price of gold has continued to trade below $4300 per ounce in London as global stock markets hover near five-week lows and bond prices fall ahead of the Federal Reserve's expected interest rate rise tomorrow.
As Western governments face rising borrowing costs, with bond yields hitting multi-decade highs, oil prices remain firm above $100 per barrel. The energy giants Russia and Saudi Arabia have signaled a continuation of their stance on Ukraine and Yemen, respectively.
Despite short-term headwinds from rising oil prices and interest rates, central banks are accumulating gold as part of a broader diversification strategy, according to ICBC Standard. Goldman Sachs notes that this trend began in 2022 when G7 countries froze Russian central bank assets in Europe.
China's People's Bank has been actively buying gold, with the heaviest addition since October 2023 reported in August at 20 tonnes. Gold prices have risen over 130% in US Dollar terms since then but only by 105% in Chinese Yuan terms.