Gold’s Resilience Underscores Deep Structural Demand

Published 21/10/2025, 07:52
Updated 21/10/2025, 07:54

Gold continues to show an almost reflexive resilience, edging higher in early Asian trading as dip-buyers once again stepped in. The brief softness in price was quickly absorbed, underscoring a deeper conviction that the long-term bull trend remains intact. Each minor retreat seems to draw fresh inflows, suggesting that liquidity in the gold market remains both deep and opportunistic.

The latest uptick comes amid shifting macro currents. Real yields have softened modestly, easing pressure on non-yielding assets like gold. Investors appear increasingly inclined to hedge policy uncertainty rather than chase equities after a volatile few weeks across global markets. With inflation expectations stabilizing but growth concerns lingering, gold’s appeal as a portfolio diversifier has strengthened. The recent price action suggests that capital is waiting on the sidelines for any short-term weakness to re-enter the trade.

This behavior reflects a market that views gold not merely as a defensive asset, but as a structural component of the global investment cycle. Even as the dollar index (DXY) hovers near 99.5 and U.S. 10-year Treasury yields fluctuate around 3.8%, spot gold has stabilized near $4,360 per ounce.

The absence of a sustained correction signals that macro funds and central banks remain net buyers, while short-term traders appear unwilling to stay short for long. The pattern of higher lows in recent sessions shows that buyers continue to defend key support levels with conviction.

For broader markets, the implications are clear. The resilience in gold comes even as risk assets oscillate. Equities have gained modestly in Asia, with the MSCI Asia-Pacific index rising 0.3% as risk sentiment steadies. However, the persistence of gold buying during equity recoveries points to a cautious undercurrent. Real rates remain positive, but positioning indicates investors are still pricing a policy pivot from the Federal Reserve in the coming months. That dynamic keeps a floor under bullion, even as nominal yields rise intermittently.

Looking ahead, the next key trigger for gold’s direction will be US inflation data and forward guidance from the Fed. A softer-than-expected CPI print could reinforce the case for rate cuts, potentially driving spot prices toward the $4,400–$4,500 range within weeks.

Conversely, a surprise uptick in core inflation or stronger labor data would strengthen the dollar and test gold’s near-term support near $4,300. Over the next quarter, much will depend on whether real yields continue to ease or reprice higher in response to fiscal expansion and energy price volatility.

For investors, the takeaway is that gold’s pullbacks are becoming shallower, confirming the presence of strong underlying demand. The opportunity lies in scaling exposure on weakness rather than chasing breakouts. The main risk remains a sudden resurgence in real yields, which could trigger profit-taking. Until that occurs, the bias favors accumulation, as the metal’s resilience signals that buyers continue to treat every dip as a chance to rejoin the long-term uptrend.

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