Gold Poised for Brighter Q4 as Central Banks Continue Buying

Despite a challenging macro environment in Q3, gold managed to stay positive for the quarter. The precious metal had dropped by 14% in Q2 but bounced back with a 6.4% gain in Q3.

The Fed's hawkish FOMC meeting and oil prices remaining elevated should have been negative factors for gold, but its ability to remain steady suggests it could shine brighter in Q4.

A potential deal to re-open the Strait of Hormuz could see central banks delay or pause rate hikes, which would be positive for gold.

However, if bond yields continue to rise, this may limit gold's upside. Central bank buying likely remains strong in Q4 and could offset any negatives such as further strength in the US dollar or yields.