Gold Stands Firm Amid Rising Dollar and Yields

Gold's resilience in the face of rising US dollar and bond yields has been remarkable, especially considering the hawkish Fed decision in September. Despite a weakening trend in September, gold remained positive for the third quarter. The metal bounced back from its Q2 drop with a 6.4% gain on the quarter, though it was down 4% on the month at the end of September.

The precious metal spent most of Q3 fluctuating between $4,000 and $4,500 as investors were uncertain about buying the dip or selling short against the backdrop of a rising US dollar and bond yields. Central bank buying has been a significant source of support for gold, with major banks continuing their purchases in July, according to the World Gold Council (WGC).

Looking ahead to Q4, most traditional macro drivers represent a challenging environment for gold, including policy tightening from major central banks like the Fed and the ECB. However, continued central bank buying could keep gold prices stable or even push them higher as investors and speculators try to front-run these purchases.