Gold dip draws Asian buyers as North American funds lose cash

AI desk brief

Lower gold prices are pulling physical buyers back in: Indian bullion premiums rose to $15/oz for the week ended Oct. 23 from $11 a week earlier, while Shanghai Gold Exchange weekly volume in a physically settled gold contract jumped to about 430 tonnes, the highest since April. The move came after a 4% weekly slide in spot gold to the low $4,000s/oz, with BMO saying the decline is starting to draw buyers back into the market.

Financial demand softened at the same time. Global gold ETFs posted $1.1bn of net outflows in the week ended Oct. 23, including $1.7bn of withdrawals from North America partly offset by $485m of European inflows, while speculative net longs fell to the lowest since August. Central banks were mixed: Russia sold 6 tonnes in September, Kazakhstan flagged a possible reduction in gold’s reserve share, and China extended its buying streak to 23 straight months. BMO said the next key catalyst is the Fed decision, with markets pricing less than a 10% chance of another hike as of Oct. 27, alongside Thursday’s U.S. growth and inflation data.