Gold prices hold above $4,000
2026-10-29 00:08:23
Driven by high market expectations for Anthropic's IPO, demand for risk assets rebounded, stabilizing gold prices. Gold is used as a liquidity tool to meet margin requirements in stock trading. Therefore, the recent decline in the S&P 500 index also pushed gold prices below $4,000 per ounce. Although this situation stimulated demand for gold from Chinese residents, the scale of demand is clearly insufficient to trigger a new round of price increases. 
For decades, gold has been highly sensitive to the real yield on US Treasury bonds. Both assets are considered tools for maintaining the purchasing power of currency. Furthermore, rising Treasury yields reduce the investment appeal of precious metals, accompanied by outflows from ETFs, putting downward pressure on gold prices. However, in 2022, this correlation between gold and US Treasuries was broken due to the freezing of Russia's gold and foreign exchange reserves. Market confidence in US Treasuries declined, while confidence in gold rose. From January to September this year, the historical correlation between the two returned; however, in October, gold prices fell sharply along with US Treasury yields. When yields subsequently began to rise, gold rebounded from its lows, but this was more of a speculative rebound. In contrast, changes in the correlation between various markets are more noteworthy. Currently, the stock market has a much greater impact on gold prices than in the past. Over the past four years, huge amounts of capital have flowed into the stock market. In 2026, a large amount of capital will rapidly withdraw from the bond market, and gold will naturally be affected. 
(Spot gold daily chart source: FX678) The Federal Reserve's policy stance is also a significant factor contributing to the frequent unusual price movements in gold. Logically, given the positive US macroeconomic data and high oil prices, the Fed should be tightening monetary policy, but it has not yet done so. This implies that the risk of a significant future rate hike by the Fed is accumulating, putting continued pressure on gold prices. If the Federal Open Market Committee (FOMC) keeps interest rates unchanged at its October meeting, but internal disagreements exist, gold prices could potentially fall below $4,000 per ounce again. At that point, both the bond and stock markets would likely experience a sell-off.
For decades, gold has been highly sensitive to the real yield on US Treasury bonds. Both assets are considered tools for maintaining the purchasing power of currency. Furthermore, rising Treasury yields reduce the investment appeal of precious metals, accompanied by outflows from ETFs, putting downward pressure on gold prices. However, in 2022, this correlation between gold and US Treasuries was broken due to the freezing of Russia's gold and foreign exchange reserves. Market confidence in US Treasuries declined, while confidence in gold rose. From January to September this year, the historical correlation between the two returned; however, in October, gold prices fell sharply along with US Treasury yields. When yields subsequently began to rise, gold rebounded from its lows, but this was more of a speculative rebound. In contrast, changes in the correlation between various markets are more noteworthy. Currently, the stock market has a much greater impact on gold prices than in the past. Over the past four years, huge amounts of capital have flowed into the stock market. In 2026, a large amount of capital will rapidly withdraw from the bond market, and gold will naturally be affected. (Spot gold daily chart source: FX678) The Federal Reserve's policy stance is also a significant factor contributing to the frequent unusual price movements in gold. Logically, given the positive US macroeconomic data and high oil prices, the Fed should be tightening monetary policy, but it has not yet done so. This implies that the risk of a significant future rate hike by the Fed is accumulating, putting continued pressure on gold prices. If the Federal Open Market Committee (FOMC) keeps interest rates unchanged at its October meeting, but internal disagreements exist, gold prices could potentially fall below $4,000 per ounce again. At that point, both the bond and stock markets would likely experience a sell-off.
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