Central Banks Keep Buying Gold as Bond Yields Climb — The Floor Is Holding

Rising yields usually spell trouble for gold. A bond that pays interest looks more attractive next to a metal that pays nothing, and money rotates out. This autumn, central bankers pushed back on that logic — gold, they said, still earns its spot in reserves even with government yields climbing.

What's changed is the demand base. Speakers pointed to a structural shift that began in 2022, powered largely by emerging-market central banks accumulating bullion to diversify away from the US dollar. Metals Focus expects official purchases to slow about 15% this year to roughly 720 tonnes. That's a step down from the pace, but it still towers over pre-2022 norms.

For US buyers, the price lives in dollars directly — spot was near $4,140 an ounce in early October — so there's no currency layer to translate. The variable that matters here is the Federal Reserve. High real rates are the main thing capping gold, and that's exactly why the central-bank story is notable: steady official buying is holding a floor even while the Fed keeps policy restrictive.

Sprott's John Hathaway and Incrementum's Ronald-Peter Stöferle, speaking at the Precious Metals Summit in Beaver Creek, framed it as more than a cyclical bull run. Hathaway tied the broken gold-bond relationship to fading confidence in fixed income as a safe haven; Stöferle sees gold stepping into a monetary role alongside — or against — government bonds and the dollar. Pension funds using bullion as a bond hedge reinforce the point.

The caveat is honest: official buying is cooling, and a hawkish Fed with high real rates can keep a lid on how far this runs. A stronger floor is support, not propulsion.