Gold’s selloff shows central bank selling is more than just speculation - Natixis

Gold’s recent selloff, which saw an almost 8% overnight drop before some recovery, signals that central bank selling is a concrete factor rather than mere speculation, according to Natixis analyst Bernard Dahdah. He warns that gold prices could decline to $4,000/oz amid rising global economic uncertainty and inflation fears, underpinned by central banks possibly offloading gold to support their currencies or fund energy imports. Dahdah highlights that the recent price moves do not align cleanly with expectations of a hawkish monetary policy pivot—U.S. yields and the DXY have been relatively stable—suggesting the pressure on gold is increasingly driven by central bank selling and large outflows from physically backed ETFs. He notes the reversal of the two main drivers—previously supportive conditions for gold have flipped, indicating near-term risks to prices. Despite near-term downward pressure, Dahdah sees sub-$4,100/oz gold levels as attractive long-term buying opportunities. He flags that if energy infrastructure damage is limited and oil prices retrace pre-conflict levels, central banks might resume gold purchasing, which could support gold’s recovery beyond $5,000/oz over time. Immediate risks remain tied to geopolitical tensions, inflation trajectories, and monetary policy clarity.