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Highlight: Geopolitical risk rose and growth showed signs of slowing. Middle East tensions pushed energy prices higher, while the US eased sanctions on Russian diesel. In the US, the budget deficit reached almost US$2tn for fiscal 2026, about 6% of GDP and well above the historical average of 3.8%. Fed minutes showed a unanimous vote for the September hike, with most officials expecting at least one more by year end. In Asia, China’s holiday spending was patchy and the Reserve Bank of India raised rates by 25bp to 5.5%, its first hike in almost four years.
Gold update: A quiet week. Gold traded in a range and edged down 0.1% to US$4,186/oz on the LBMA PM price, taking the year-to-date loss to 4.2%. Slightly lower bond yields gave gold some support, but slowing ETF inflows held it back.
Who’s buying (and who’s selling): The picture was mixed again. ETF inflows slowed and COMEX futures net longs fell, but options traders turned less bearish and Chinese investors added to their long positions after returning from Golden Week.
The fiscal risk angle: This is the main theme. Turmoil in France’s bond market has brought fiscal sustainability back into focus, with French bond term premiums at their highest since the early 2000s as budget talks begin. WGC notes that worries about rising government debt are spreading across major economies. That helps explain why European and US investors have kept buying gold ETFs in recent months despite falling prices.
Weekly radar: September core CPI was expected to ease slightly, which could support expectations that the Fed holds this month, though a rising PPI and firm manufacturing could complicate that. On geopolitics, Trump announced a Russia–Ukraine “energy ceasefire” of uncertain durability and signalled the US would pause attacks on Iran before the midterms while negotiations continue.
Takeout: Gold’s price went sideways, but the case for owning it is strengthening as governments’ debt problems grow. That’s why ETF buyers keep coming back even in a falling market.