Gold's Asian Demand Puzzle: Record Central-Bank Buying Clashes With an 81% Indian Import Collapse

Gold finished Friday at 4,169.08 USD per troy ounce, a fractional -0.04% daily loss that tells only part of the story. Behind that flat close sits a week of crosscurrents: a technology-stock selloff that pushed investors toward government bonds, a softer dollar, firmer oil prices, and a set of Asian demand figures that point in opposite directions.

The session's support came from outside the metals market entirely. Worries about the scale of AI investment triggered a flight from semiconductor names into sovereign debt, and the resulting drop in US yields lowered the opportunity cost of holding bullion. A weaker dollar added to the tailwind. According to Reuters, however, higher crude prices outweighed those supports, which is why the metal could not muster a positive weekly balance despite Friday's stabilization after a midweek pullback.

A Split Demand Picture From Asia

The demand side is where the signals get genuinely tangled. India's gold imports collapsed by 81.27% year on year in September, according to the country's Ministry of Commerce and Industry. That is a clear sign of weakness in the import channel — but it describes inflows, not total demand, and should not be read as an equivalent drop in overall gold consumption.

China's central bank moved in the opposite direction. The World Gold Council reported Thursday that the PBoC bought 23 tonnes in September, its largest monthly addition since October 2023. Those official purchases stand as a counterweight to India's import slump.

Yet state buying is not the same as a broad revival of Chinese gold demand. The WGC painted a far weaker picture of the wholesale market: physical wholesale demand reached just 234 tonnes in the third quarter of 2026, down 21% year on year and 44% below the ten-year average. Central-bank accumulation and soft wholesale offtake are coexisting, and lumping them together as "strong Asian demand" would blur a real distinction.

Inflation Still Casts a Shadow

The macro backdrop remains uncomfortable. September US consumer price data came in hotter than expected, lifting expectations of a more restrictive policy path. Market observers, citing dpa-AFX, read Fed Chair Kevin Warsh's remarks as a hint at a possible rate pause in October, trimming the odds of another hike — though that is an interpretation, not a confirmed decision.

Financial investors, meanwhile, keep buying. The WGC pointed Tuesday to sustained inflows into gold exchange-traded funds in Europe and the US, driven by mounting concerns over sovereign debt and fiscal sustainability. That flow offers a counterweight to the weak import and wholesale numbers.

DZ BANK Looks Past the December Hike

DZ BANK Research raised its end-2026 gold forecast Friday to around 4,300 USD per troy ounce. The house expects relief after what it sees as a likely final US rate step in December, with potential up to the 5,000 USD area on a one-year horizon. That view rests on a more favorable rate environment rather than on demand that is already strong across the board.

The next concrete test is the FOMC meeting on October 27–28, 2026, with the rate decision and press conference on the 28th capable of moving the dollar and yields once more. A broadly supported recovery would need the conflicting demand indicators to fall into line alongside the rate signals — and September's Indian import collapse is a reminder to stay cautious.