Gold Pulls Back, Not a New Regime: Central Banks Accumulate Amid Rate Hike

Gold's price drop to around $4,300-$4,400 per ounce is not a sign of a new regime, but rather a pullback from its January 2026 high-water mark of $5,590/oz to $5,608.35/oz.

The World Gold Council's Q2 2026 Demand Trends report showed gold dropped roughly 14% in the quarter, with an LBMA PM fix top of $3,994.50 on June 25th.

Central banks have been accumulating gold, with net purchases exceeding both the previous quarter and the five-year average, according to the World Gold Council's Q1 2026 report.

The Fed raised interest rates by 25 basis points in September, but real interest rates remain the most straightforward macro lever on gold, and the effect of the hike hinges on how inflation expectations move versus nominal rates.