Gold (GLD) Price on Solana

Morgan Stanley strategist Amy Gower told CNBC that gold's recent slide, driven by rising bond yields, doesn't undermine the longer-term reasons to hold the metal. She pointed to three. The first is physical demand, especially from central banks, which bought a net 23 metric tons in July. China bought 20 tons and Poland bought 8, and Chinese gold imports are on track for their highest level since 2017.

The second is continued market concern about long-term public debt and fiscal sustainability, which Gower said gives bullion structural support despite the near-term pressure from yields. The third is the chance of policy shifts. With traders increasingly expecting fresh Federal Reserve rate hikes, Gower said further policy intervention or a change in market expectations could support gold prices.

Gold dropped sharply on Monday, September 28, as rising US Treasury yields raised the cost of holding a metal that pays no interest. Outlook Money reported spot gold down 2.11% at \$4,197.40 an ounce. In India, MCX October gold futures fell 2.13% to Rs 1,47,667 per 10 grams. Silver fell further, losing about 3.6% on Comex.

The main pressure came from the 10-year Treasury yield, which climbed to 5.20%, a level last seen about two decades ago. The dollar index also rose to 101.39, a two-month high, which makes dollar-priced gold more expensive for overseas buyers. On top of that, the CME FedWatch Tool put the odds of a 25 basis point Federal Reserve rate hike in October at 68.1%, and investors are watching inflation closely as Brent crude trades near \$107 a barrel.

Venezuela's government and opposition are nearing an agreement to transfer roughly 31 metric tons of gold — valued at approximately $4 billion — from the Bank of England to the Federal Reserve Bank of New York, according to the Financial Times citing four sources familiar with the discussions. The Bank of England has held the bullion since early 2019, when Britain joined nations backing opposition leader Juan Guaidó over then-President Nicolás Maduro, and UK courts currently govern who holds legal authority over the account.

Under the proposed arrangement, the interim government led by Delcy Rodriguez would gain legal control of the holdings but could not immediately sell the gold; instead, it could be pledged as collateral for borrowing to fund reconstruction following June earthquakes. Venezuela's National Assembly chief Jorge Rodriguez framed the gold recovery as a tool to combat surging inflation. The Bank of England confirmed it cannot act without a further UK court order designating legal authority, meaning any final transfer still requires judicial clearance from British courts.

Ray Dalio, founder of Bridgewater Associates, is recommending that investors allocate 10–15% of their portfolios to gold and reduce bond exposure, citing a debt monetization thesis. Dalio argues that when government debt grows faster than the economy, policymakers face pressure to print money, which erodes confidence in fiat currencies and the bonds denominated in them. Assets with supply constraints — gold chief among them — become more attractive as hedges against this kind of monetary regime shift.

The recommendation comes as the 10-year Treasury yield sits around 4.83%, meaning investors following Dalio's advice would trade away significant contractual income for inflation and currency debasement protection. Dalio has not specified a timetable for the scenario he describes, and analysts note that the trade-off cuts differently depending on investor age and income needs — retirees relying on cash flows from bonds face greater cost in making the shift than younger accumulators better positioned to absorb gold's price volatility.

Bank of America analysts have modeled just how much runway remains in central bank gold accumulation — and the numbers are large. Using a framework where gold represents 30% of total reserve assets (the level BofA identifies as portfolio-efficiency-maximizing), global central banks collectively fall short by roughly 2,300 tonnes, or about two years of purchases at the 2024 pace.

That near-term figure understates the structural picture. When excluding institutions already at or above the 30% threshold, under-allocated central banks would need approximately 20,333 tonnes to close the gap — more than two decades of buying at recent rates. BofA calls this allocation shortfall "supportive for gold," particularly as reserve diversification away from the dollar continues.

China leads individual shortfalls at 5,628 tonnes, followed by Japan (1,866 tonnes) and Switzerland (1,192 tonnes). Taiwan, South Korea, Saudi Arabia, and Singapore each require over 700 tonnes. Global official holdings currently stand at around 36,705 tonnes.

The 2024 backdrop underscores the momentum: central banks posted record net purchases of 1,092 tonnes that year. Since March 2022, Türkiye has led cumulative acquisitions at 815 tonnes, with Poland close behind at 808 tonnes.

The analysis reinforces why gold has held structural bid support well beyond typical macro cycles — the institutional demand pipeline, measured in decades rather than quarters, remains far from full.

Gold spot prices recovered 0.8% to $4,351.28 per ounce on Friday as the metal steadied ahead of the August US consumer price index release, though it remained on track for a third straight weekly decline after falling 1.8% the prior session. Economists forecast headline CPI at +0.4% month-on-month and +3.4% year-over-year, with core CPI expected to rise 0.2% from July — readings that carry added weight given markets are pricing roughly a 70% probability of another Fed rate hike. August producer prices, released Thursday, rose 0.4%, the largest monthly gain since May, reinforcing the case for continued policy tightness.

Longer-term institutional demand remained robust even as prices softened near term. Global gold ETFs took in $18 billion during August — their second-largest monthly inflow on record — pushing holdings to a record 4,189 tonnes and total assets under management up 16% to $615 billion. Analyst Tony Sycamore noted that gold is currently trading below its 200-day moving average near $4,537, leaving open a move toward $4,200 should buyers fail to reclaim that level.