The central bank's gold reserves continue to grow, and the medium- to long-term bullish trend in gold prices is taking shape.

Recent international gold price movements have been highly volatile. Under the dual pressures of a strengthening US dollar and the Federal Reserve’s hawkish stance, the price briefly dipped below $4,000 per ounce, then quickly rebounded due to buying support, demonstrating solid market bottom support. Amidst this turbulent market, central banks worldwide have continued their gold reserve purchases, which have instead become a stabilizing force.

Central Banks Frequently Buying, Gold Reserves Hit New Highs

Goldman Sachs’s latest market report indicates that the pace of global central bank gold purchases is accelerating. In September alone, central banks increased their gold reserves by a total of 64 tons, more than tripling the previous month, showing that official funds are stepping up their efforts. China added 15 tons in a single month, and the actions of Russia and emerging market central banks are similarly active, reflecting strategic considerations to hedge geopolitical risks and reduce structural foreign exchange risks.

Goldman Sachs estimates that this “central bank gold-buying wave” will continue, with average monthly purchases reaching around 80 tons from the fourth quarter through next year. Against the backdrop of ongoing growth in central bank gold reserves, the demand stability for gold as an official reserve asset is being reinforced.

Expectations of Rate Cuts Enhance Gold Attractiveness

Market expectations regarding the Federal Reserve’s policy path are subtly shifting. Although officials remain cautious about inflation recently, economic data releases have adjusted the market’s probability of further rate cuts within the year. Once the rate-cut cycle begins gradually, both nominal and real interest rates will face downward pressure, significantly increasing the relative attractiveness of gold, which is nominally non-yielding.

The US dollar index has recently held above 99.4, exerting short-term pressure on gold prices. However, in the long term, if the dollar’s rally slows and rate expectations shift, the pendulum effect between the dollar and gold will reverse.

Navigating Gold Price Fluctuations, How Should Taiwanese Investors Respond

From a technical perspective, gold prices are repeatedly testing the $4,000 to $4,080 range. Each dip near the moving average triggers substantial buying, indicating that the market remains optimistic about the future. Latest trading data from Taiwan Bank also reflects ongoing investor interest in gold.

For Taiwanese investors, the current retracement in gold prices offers a good opportunity for medium- to long-term positioning. Experts suggest participating through multiple channels, including the convenience of gold savings accounts, the liquidity advantages of gold ETFs, or the hedging properties of physical gold, choosing based on individual risk tolerance. A strategy of phased accumulation and buying on dips can effectively reduce risks from short-term volatility.

Goldman Sachs maintains its forecast that gold prices could reach $4,900 by the end of next year, supported by central bank gold reserve demand, clearer expectations of rate cuts, and ongoing geopolitical risks. If Taiwanese investors can seize this adjustment opportunity and patiently wait for further developments in interest rates and geopolitical situations, they may achieve better entry costs in subsequent gold market movements.