“The decrease in inflation in the US caused the sale of the US dollar, which, in turn, supported the value of the yellow precious metal. Real underlying yields in the US have also fallen from a recent high, lowering opportunity costs. However, inflation is well above the Fed's 2% target, so there is little hope that the Fed will move to a softer stance anytime soon.
Demand for gold from speculative investors led to an increase in gold prices, but there were no strategic purchases from gold ETFs, the bank said. Physical demand has weakened recently, as evidenced by the decline in the spot premium in October. However, official purchases of gold by the Central Banks continue.