Gold prices slide as higher rates and a strong dollar dampen demand

Gold’s recent rally unraveled, with the metal losing about $400 per ounce after its August high and continuing to slide through October. David Kučera of Partners warned that investors may have mistaken the prior rise for a buying opportunity, forgetting that gold does not generate income. XTB analysts Stanislav Viktorín and Tomáš Vranka explained that central-bank decisions to keep rates elevated, coupled with rising yields on government bonds in the United States, the Czech Republic and France, have shifted investor preference toward interest-bearing assets.

A strengthening U.S. dollar, driven by Federal Reserve policy, further pressured gold prices. While geopolitical risks normally boost safe-haven demand, they also raise inflation expectations and could sustain higher rates, counteracting gold’s appeal. Nonetheless, central banks and ETFs continue buying gold, and major banks retain optimistic long-term forecasts.