Gold ETFs Log Tenth Straight Week of Inflows as Record Yields Cap the Upside

Gold holds near $4,171 after a 6% September slide, with 5.3% Treasury yields capping gains while central bank and ETF buying builds a floor.

Gold is finding its footing after a bruising September, though the metal's recovery remains tethered by a bond market that keeps setting multi-year highs. Spot bullion changed hands at $4,171.02 an ounce on the day, a gain of 0.3%, while an earlier reading put the price at $4,158.17 — roughly 4.1% below its 50-day moving average of $4,335.30.

The softer tone in US inflation data has taken some of the sting out of rate expectations. The Bureau of Economic Analysis reported that the core personal consumption expenditures index rose 3.0% year-on-year in August, undershooting the forecasts of many economists. The reading lowered the odds of another rate move at the end of October, a shift that followed hawkish Federal Reserve signals and an increase in the benchmark rate corridor just over a week ago — a combination that had weighed heavily on the precious metal.

Consumers Keep Spending, Price Pressure Lingers

Beneath the cooling inflation print, the US economy continues to show resilience. Consumer spending climbed 0.9% in August from the previous month, underpinned by steady household demand. With core inflation still running above the Fed's 2% target despite the pullback, uncertainty over the path of monetary policy through year-end continues to dominate sentiment across financial markets.

Treasury Yields Blunt the Rebound

Any relief for gold is being checked by the bond market. The yield on ten-year US Treasuries pushed to around 5.3%, a level not seen in years. Because bullion pays no income, richer fixed-income returns raise the opportunity cost of holding it and deter speculative capital. Analysts at OCBC noted that the climb in yields has noticeably intensified technical pressure on the metal, with caution prevailing among traders after the recent slide below key price levels. A firm US dollar adds to the headwinds, making gold more expensive for buyers outside the dollar bloc and complicating recovery attempts.

September proved costly for the metal, which shed roughly 6% of its value on media reports, with the Fed's hawkish stance leaving the door open to further tightening.

Physical Demand Builds a Floor

Working against a deeper decline is steady buying from official institutions. World Gold Council data show global central banks added a net 23 tonnes of gold in July, with China and Poland logging the largest purchases. China's central bank expanded its holdings by a further 20.2 tonnes in August — its biggest monthly increase in nearly three years.

Institutional investors are quietly doing their part as well. According to Société Générale, gold ETFs recorded their third-largest monthly inflow on record in August. The World Gold Council put global net inflows for that month at $18 billion, with fund holdings rising 121 tonnes to 4,189 tonnes in total. The buying reflects a persistent desire among institutions to hedge portfolios against monetary and geopolitical risk.

That trend has carried into the current quarter. Physically backed gold ETFs notched their tenth consecutive week of net inflows, with data released Monday showing $1.72 billion of subscriptions against $1.59 billion of redemptions in the prior week. The World Gold Council pegged net central bank purchases in the second quarter of 2026 at 289 tonnes, and market watchers expect official-sector buying to average 50 tonnes a month over the full year. A planned summit between Donald Trump and Xi Jinping is also drawing institutional attention to the metal as a hedging tool.

The market still sits a long way from its 52-week high of $5,598.58, but the steady physical demand from Asia and the central bank sector continues to stretch a safety net beneath prices.