Record Gold Fund Holdings Meet a Trimmed Forecast — and a Fed Still Undecided

Gold investors are holding two apparently contradictory signals at once: physical-backed funds have never been fuller, yet at least one major bank has just cut its near-term price target. Neither development cancels the other out, and together they sketch a market that is structurally supported but tactically uncertain.

The World Gold Council put worldwide September inflows into physically backed gold funds at 67.3 tonnes, worth close to USD 10 billion. Global holdings climbed to a record 4,256 tonnes. The council had already reported on 7 October that September inflows reached USD 10 billion, with third-quarter flows hitting a record USD 31 billion.

Those numbers document buying, not forecasting. Fund holdings and analyst price targets measure different things — flows record what investors have already done, while projections express expectations about where prices go next. A record stockpile is therefore no guarantee that the rally resumes.

Jefferies trims the near term, keeps the long view

Jefferies made that distinction explicit this week. The bank lowered its average price forecast for 2026 to USD 4,511 an ounce from USD 4,595, while leaving its 2027 expectation untouched at USD 5,000. The revision signals caution about the road immediately ahead rather than a wholesale retreat from the case for higher gold.

Positioning data from the US Commodity Futures Trading Commission, published yesterday, points the same way. Non-commercial traders held 245,300 long COMEX gold futures contracts as of the 13 October reporting date, a clear overweight toward rising prices. But the snapshot captures holdings at a single point in time — not when they were built, and not whether they grew from the prior week. A long-heavy book alone is no evidence of a fresh wave of speculative demand.

Warsh offers no roadmap

Price action has been similarly ambiguous. Gold recovered part of Wednesday's pullback after Fed Chair Kevin Warsh tempered expectations of an October rate hike, according to dpa-AFX. Speaking in Bangkok, Warsh gave no indication of a rate increase and declined to pre-empt the central bank's decision. A softer US dollar and falling Treasury yields lent additional support, Reuters reported.

Friday's close stood at USD 4,169.08 a troy ounce, leaving gold below the roughly USD 4,235 resistance level Saxo Bank flagged as a key marker. Saxo attributed the stabilisation to declining bond yields, the weaker dollar and a midweek slide in technology stocks — a reading that emphasises shifts in the broader financial backdrop rather than any news on physical demand.

The rate question is far from settled. Saxo's outlook assumes the Fed delivers one final hike in December. For next year, the bank pointed to possible relief from lower oil prices, easing yield pressure and a softer dollar, with sustained central bank purchases and the debate over US sovereign debt as structural supports. That is a conditional recovery scenario, not a promise of higher prices.

Two clocks running at different speeds

The next confirmed policy date is the regular FOMC meeting on 27–28 October, with the rate decision due on 28 October. Until then, investors must weigh strong fund demand and a reduced short-term target against an unchanged long-term outlook — and neither resolves the question of what the Fed does next. The World Gold Council has also cited rising sovereign risk premiums and concerns about debt sustainability as potential drivers, noting that European and US investors kept adding ETF exposure even through the recent price weakness.