Gold seeks footing near $4,000 as short-term forces clash with long-term demand

what happened

Reuters columnist Clyde Russell says gold appears to be finding support near $4,000 an ounce, even as short-term forces pull it in different directions. Spot gold closed at $4,065.63 an ounce on November 6, after bottoming at $3,869.85 on October 30. The metal's record this year was $5,594.82, set on January 29, and it has since lost ground as US rate expectations tilted toward possible hikes.

Russell sees equity weakness, tied to doubts about the AI investment boom and the Democratic win in the US midterms, as a double-edged factor. A stock selloff could force investors to sell gold too, though a broader economic slump could later lift the metal. Easing crude prices, on hopes of an end to the Iran conflict, could push rate expectations back toward neutral and possibly toward cuts next year.

The longer view is steadier. According to World Gold Council data, central banks bought 321.2 tons in the third quarter, compared with 296.3 tons in the second. ETF inflows reached 19 tons in October, and jewellery demand in India and China has picked up. Russell argues that a dip below $4,000 is likely to encourage more central bank buying.

why it matters

Gold's near-term direction hinges on equities, oil and the Federal Reserve outlook, while official buying and jewellery demand set a firmer backdrop over the longer term. This is the columnist's opinion, not a forecast.

market impact

Gold: equity weakness and cheaper oil pull in opposite directions, while central bank buying supports prices

• ↔Gold mixed — an equity selloff could drag the metal lower, but a weaker economy may support it later

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