Gold’s rollercoaster ride shows the messy state of the global economy - SMH.com.au

AI desk brief

Gold’s 2026 rollercoaster is framed as a macro read-through on rates, inflation, geopolitics and reserve diversification: the metal hit a record $US5,595/oz in late January, sank below $US4,000 in July, rebounded to just under $US4,700 in late August, and was back near $US4,160 this week/$US4,135 spot. The article argues the latest leg lower reflects rising US yields, a stronger dollar, and the higher opportunity cost of holding a non-yielding asset, even as war, fiscal stress and inflation keep gold’s safe-haven bid alive.

On flows, it highlights China’s record buying last year of more than 1,000 tonnes, continued central-bank reserve rotation away from US Treasuries, and gold’s rise to about 27% of central-bank reserves at end-2025 versus 20% a year earlier. The piece also notes China’s Treasury holdings have fallen from $US1.3tn in 2013 to $US618bn, while markets are pricing a 70% chance of another 25bp Fed hike this month and 100bp of hikes over the next 12 months, a setup that is near-term bearish for gold despite longer-term support from macro stress.