Gold Shines Through Adversity as Dollar Rises
Gold demonstrated remarkable resilience in the face of a strong dollar and rising yields during Q3. Despite a hawkish FOMC meeting, oil prices remaining elevated due to the US-Iran conflict, and bond yields breaking out, gold held steady in positive territory for the quarter. The precious metal's ability to remain steady despite these challenges suggests it may have a brighter outlook in Q4.
The Q3 performance was mixed, with gold initially up 6.4% on the quarter but then weakening in September to be down 4% on the month. This means gold is around 23% off its January peak of $5,598, requiring a significant rally to reach new highs.
Central bank buying continued to support gold, with major central banks like China and Poland leading the way. In fact, the People's Bank of China has been accumulating double-digit monthly purchases of gold since May 2026. This trend is likely to continue in Q4, offsetting any negatives such as further strength in the US dollar or yields.