Spot gold price surge amid interest rate uncertainty & midterms

Expectations of higher interest rates from major central banks coupled by uncertainties surrounding the US midterm elections, have fuelled a surge in global central bank gold purchases -- which also marked their fastest hikes in nearly two years -- pushing spot gold prices back above 4,000 US dollars an ounce.

The latest data from the World Gold Council shows central banks worldwide made net purchases of 321 tonnes of gold in the third quarter, up 42% year-on-year. This marks the fastest pace of buying since 2024.

Since the beginning of the year, total central bank gold purchases have reached 675 tonnes, up 6% year-on-year.

Among the buyers that have disclosed their purchases in the third quarter, China was the biggest, adding 63 tonnes to its reserves.

Poland came second -- with purchases of 41 tonnes.

Russia was the only major seller, offloading 19 tonnes.

Some analysts say the recent pullback in gold prices has given central banks an opportunity to buy on dips.

Meanwhile, a stronger US dollar has also increased the appeal of converting foreign exchange reserves into gold to diversify risk.