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Gold Prices Fall 4.2% as Treasury Demand Outpaces Gold Buying
Gold declined 4.2% during the week ended October 23, 2026, as investors favored U.S. Treasuries despite geopolitical tensions and inflation concerns. Gold ETF outflows and reduced futures positioning added to the weakness ahead of the Federal Reserve's October 28 policy decision.
Published: October 27, 2026
Market data: Week ended October 23, 2026
Key Points
- Gold: LBMA Gold Price PM ↓4.2% to US$4,013/oz; year-to-date performance −8.1%.
- Investment flows: Gold ETFs recorded net outflows, concentrated in North America.
- Investor positioning: Futures net-long exposure declined as near-term sentiment weakened.
- Federal Reserve: Markets assigned less than 10% probability to an October rate increase.
MONTREAL (Scrap Monster): Gold prices recorded a sharp weekly decline as investors shifted toward U.S. government bonds despite heightened geopolitical tensions and persistent inflation concerns.
According to the World Gold Council's October 26 Weekly Markets Monitor, the LBMA Gold Price PM fell 4.2% to US$4,013 per troy ounce during the week ended October 23.
The decline extended gold's year-to-date loss to 8.1%.
Escalating tensions in the Middle East pushed oil prices to a six-month high, while concerns about artificial intelligence spending weighed on technology shares and global equity markets.
U.S. Treasury yields declined sharply as investors moved toward government bonds. However, the weaker yields did not prevent gold from falling.
Gold ETF Outflows Signal Weaker Investor Positioning
Global gold-backed exchange-traded funds recorded outflows during the week, primarily from North America.
European investors continued adding gold exposure amid volatility in the region's bond markets, highlighting different investor responses to the same global uncertainties.
Futures positioning also weakened. Net-long positions declined, while gold options activity reflected a bearish near-term outlook.
ScrapMonster Edge: Gold Falls Despite Lower Treasury Yields
Gold's weekly decline was notable because U.S. Treasury yields also fell, a development that can ordinarily support non-yielding bullion.
The World Gold Council attributed the divergence partly to investors favoring Treasuries amid weakness in technology stocks, rather than a significant improvement in inflation expectations.
The regional ETF split reinforces that distinction: North American funds experienced outflows while European funds continued attracting investment.
For precious-metal recyclers and refiners, changes in bullion benchmarks affect underlying metal values, although actual scrap buying prices also depend on purity, recovery and refining costs.
Fed Decision and Inflation Data Take Center Stage
Markets are now focused on the Federal Reserve's October 28 policy decision, with another interest-rate increase considered unlikely.
According to CME FedWatch probabilities cited by the World Gold Council, expectations of an October rate increase had fallen below 10%, compared with approximately 70% a month earlier.
Attention will then shift to Thursday's U.S. Personal Consumption Expenditures inflation report, with annual inflation forecast at 3.6%, and third-quarter GDP growth expected at 3.2%, compared with 2.2% in the previous quarter.
Both figures represent forecasts available when the WGC report was published, not confirmed economic results.
Geopolitical uncertainty surrounding U.S.-Iran relations and the approaching November 3 U.S. midterm elections could also influence energy prices, Treasury yields and investor demand for gold.
The immediate question for bullion markets is whether upcoming economic data will reinforce investors' preference for government bonds or improve conditions for gold after its latest decline.
Source: World Gold Council, Weekly Markets Monitor, October 26, 2026. Gold performance figures reflect the LBMA Gold Price PM benchmark for the week ended October 23 and should not be interpreted as live spot quotations.