Gold Closes the Week at $4,382.82 as Central Bank Demand Offsets Hawkish Fed Stance

Gold settled at $4,382.82 an ounce Friday, up 0.9% and 2.8% since the Fed meeting, as oil and the dollar eased and Goldman held its 2027 target.

Gold bulls ended the trading week with the upper hand. The front-month contract settled Friday at $4,382.82 an ounce, a gain of 0.9% on the day, capping a recovery that has added 2.8% since the Federal Reserve's policy meeting last Wednesday.

The metal had initially stumbled after the Fed raised its benchmark rate by 25 basis points and signaled more tightening ahead. But two forces quickly turned the tide: crude oil prices retreated, easing fears of persistent inflation, and the US dollar softened in tandem. Cheaper energy costs feed directly into inflation expectations, which in turn lowers the opportunity cost of holding a non-yielding asset like bullion — a dynamic that lifted both futures and spot demand.

Goldman Keeps Its Long-Range Target Intact

Goldman Sachs sees the broader uptrend as firmly in place, even if the pace of gains has moderated. The bank left its year-end 2027 price target unchanged at $5,400 an ounce. Its analysts point to central banks as the market's most dependable pillar. Monetary authorities worldwide have been buying roughly 91 tonnes of gold per month, a dramatic acceleration from the 17-tonne monthly average that prevailed before 2022. Goldman expects that pace to cool somewhat, forecasting average purchases of 60 tonnes per month across 2026 and 2027 — still more than triple the pre-2022 norm.

Investment products have reinforced the bid. Physically backed gold ETFs attracted $18 billion globally in August, the second-largest monthly inflow on record, pushing total assets under management in those funds to $615 billion.

Physical reshuffling tells a similar story. The Dutch central bank moved 86 tonnes of gold from New York and Ottawa to London between March and August, lifting the share of its holdings stored in the UK capital to 32.1%.

Futures Positioning Stays Measured

Activity on US futures exchanges has been restrained rather than exuberant. Total open interest on the COMEX stood at 409,899 contracts, reflecting only a modest pullback in speculative exposure. Year to date, the metal is up 1.5%, and it remains well below its 52-week high of $5,598.58 — a gap Goldman attributes largely to the headwind from hawkish central bank policy, which curbs the appetite for speculative capital.

Trade Flows Face a Tightening Regulatory Grip

Policy intervention is also reshaping how gold moves across borders. Switzerland brought an import and purchase ban on Sudanese gold into force on 10 September, aligning with European Union sanctions and going a step further by prohibiting exports of gold-mining equipment to the country.

In a separate development, Turkey's market regulator on Thursday approved the liquidation of six investment funds run by a domestic asset manager after US authorities imposed sanctions over Iran-related dealings. Together, these moves underscore how deeply geopolitical friction now shapes the settlement channels and trade routes of the bullion market.