Gold's Q4 Outlook Brightens Amid Dollar Debasement Hopes

The third quarter of 2026 was a mixed bag for gold. After dropping 14% in Q2, gold bounced back in the first two months of Q3 and ended the quarter up 6.4%. However, it was down 4% on the month at one point, weakening its momentum heading into Q4.

The metal spent much of Q3 bouncing between $4,000 and $4,500 as volatility compressed. Investors were unsure whether to buy the dip or sell the metal short due to rising US dollar and bond yields, both negative traditional macro factors for gold.

Despite these headwinds, central bank buying continued to support gold in Q3. In July, central banks purchased 23 tonnes of gold, with China's People's Bank of China leading the charge at 20 tonnes.

Looking ahead to Q4, many traditional macro factors remain negative for gold, including policy tightening from major central banks and rising bond yields. However, if investors lose faith in the Fed's ability to control inflation or yields, the dollar debasement trade could resurface and boost gold prices.