Gold hits the "high-yield wall"! ETF buying struggles to support the broader market. Will gold prices fail to hold above $4,000 in the next three months?

Title context: Gold hits the "high-yield wall"! ETF buying struggles to support the broader market. Will gold prices fail to hold above $4,000 in the next three months? Text: A precious metals research report recently released by Wall Street financial giant Bank of America shows that the institution tends to place gold's $4,000 threshold over the next three months under a multi-pronged selling pressure testnamely weak physical spot gold demand, gold ETF buying being unable to support the market on its own, and even some global central banks potentially restarting gold sales. The institution's analysts expect that over the next three months or so, gold will find it difficult to continue oscillating above the key $4,000 level as it does now. In early Asian trading on Tuesday, spot gold and silver respectively fell to around $4,164.45 and $60.01, while the U.S. dollar index hovered near an 18-month high; recently, yields on 10-year and longer-dated U.S. Treasuries have continued to surge, and the U.S. dollar index has strengthened in response, together continuously squeezing the investment appeal of precious metals such as gold and silver. The Middle East and Russia-Ukraine geopolitical turmoil that continues to weigh on the global inflation outlook and long-dated U.S. Treasury yields has yet to ease materially. Houthi forces launched large-scale attacks on Saudi airports, and large oil tankers near the Strait of Hormuz and the Bab el-Mandeb Strait were attacked again; the Russia-Ukraine "energy ceasefire" announced by Trump has not been confirmed by either side in the conflict, and Zelensky said on the 12th that at least six energy targets were hit by Russian attacks again. International crude oil pricing benchmark Brent crude rose 1.8% to $106.65 on the 12th, then edged back to $106.04 in the morning of the 13th. On the 12th, expectations of increased Russian diesel supply did bring some buffer effect, but the Middle East geopolitical risk premium and Russia's medium- to long-term supply risk premium have not faded. Bank of America analysts predict: gold will struggle to stay above $4,000 in the next three months Although investment demand remains stable, Bank of America said in a new report released on Monday that because physical demand remains weak, the institution's precious metals analyst team remains cautious on the gold price outlook and expects gold prices to be unable to remain above $4,000 per ounce over the next three months. Although ETF demand has been positive over the past two months, Bank of America analysts said ETF demand alone is not enough to support the market and may even turn into a negative factor, because weak prices could eventually prompt investors to close positions, further intensifying selling pressure. Bank of America analysts wrote in the research report: "As the Middle East conflict escalates again, there is a risk that central banks will resume selling gold. Gold holdings have declined somewhat, but this is not necessarily surprising, because about 90% of the increase in the value of gold holdings came from valuation gains, not actual purchases." The institution's analyst team said that for gold prices to find a bottom and resume their long-term upward trend, the market needs clearer guidance from the Federal Reserve. Bank of America said that although a dovish shift in Federal Reserve monetary policy will become a more important driver for gold, gold could also regain upward momentum if market concerns about currency value dilution heat up again. Gold futures turned lower on Monday after hitting a one-week high, pressured by a stronger dollar and rising oil prices. The market will focus on this week's U.S. inflation datathe Consumer Price Index (CPI) to be released on Wednesday U.S. Eastern Time and the Producer Price Index (PPI) on Thursdayas well as Fed Chair Warsh's highly anticipated speech afterward, to further clarify the Federal Reserve's interest rate outlook. Kotak Neo senior analyst Kaynat Chainwala said in a research report that the rise in the dollar and strong high oil prices persistently above the $100 mark "have intensified market concerns that energy-driven persistent inflation may prompt the Federal Reserve to maintain a hawkish policy path," and a hawkish Federal Reserve stance will strongly suppress gold. The U.S. September CPI inflation data to be released on Wednesday will directly affect important judgments on the market's pricing path for Federal Reserve rate hikes and whether the Federal Reserve will continue raising rates in October. At early morning Beijing time on October 13, the two dovish logicsthat the "bond market is raising rates instead of the Federal Reserve" and that cooling oil prices can bring an end to the Federal Reserve's monetary tightening processencountered a major challenge: 2026 Federal Reserve FOMC voting member and Cleveland Fed President Beth Hammack once again signaled a hawkish monetary policy stancethat is, Federal Reserve officials, rather than waiting and then being forced to make large corrections to the inflation path, should adjust monetary policy early and in small steps when conditions allow. Hammack herself did not explicitly support an October rate hike in her latest speech, but the rebound in oil prices, persistently high diesel spreads, and 10-year and 30-year long-dated U.S. Treasury yields remaining near their highest levels in more than two decades are testing the market's expectations for the dovish camp's view that "the Federal Reserve will pause rate hikes in October and complete this tightening cycle soon afterward." The global asset pricing anchor moves higher, and the opportunity cost of gold assets can be said to have surged The 10-year U.S. Treasury yield, known as the "anchor of global asset pricing," has continued to climb recently. From August 31 to October 9, the 10-year yield jumped from 4.75% to 5.24%, while the 30-year yield rose from 5.25% to 5.60%, up 49 and 35 basis points respectively, both near their highest levels in more than two decades. The 10-year U.S. Treasury is called the "anchor of global asset pricing" because of its benchmark role in the dollar financing system and in the valuation of medium- to long-term cash flows. The U.S. Treasury market is large and actively traded, and the dollar is widely used for international financing and reserves, so changes in its yields have cross-market influencedollar corporate bonds usually reference Treasury yields of similar maturity plus a credit spread, housing mortgage rates are affected by Treasury and mortgage-backed securities pricing, and stock and real estate valuations are highly sensitive to the discount rate applied to future cash flows. When this global asset pricing anchor rises, while interest capital, actual earnings, and rent expectations do not improve in tandem, the prices of many real assets, including real estate and gold, face downward pressure. The impact will also transmit overseas through dollar financing costs, currency hedging, and cross-border capital flows; different currencies, maturities, and credit risks determine the extent to which specific assets are hit. The transmission chain from the global asset pricing anchor to precious metals such as gold and silver is thisenergy shocks strengthen rate hike expectations, fiscal and long-term policy uncertainty raises term premiums, thereby pushing long-dated U.S. Treasury yields higher, causing precious metals assets to enter a downward trajectory. European financial giant ING believes that AI financing demand and productivity expectations are also pushing real interest rates higher. In addition, rising rate expectations/surging long-dated U.S. Treasury yields also reduce early mortgage repayments and lengthen the duration of mortgage-backed securities (MBS), prompting holders to sell U.S. Treasury futures to hedge, further amplifying selling pressure. This in turn means that as the global asset pricing anchor moves higher, pressure will transmit through capital flows and relative valuations to other sovereign bonds, corporate financing costs, and equity discount rates. For precious metals assets such as gold, higher real yields increase the cost of holding a non-yielding asset, and a strong dollar raises the cost for overseas buyers to purchase gold, enough to temporarily outweigh war safe-haven demand. Whether gold prices can stabilize depends on whether long-dated U.S. Treasury yields and the dollar shift onto a downward trajectory, and whether the market's focus can shift back to the long-term macroeconomic risk that the real value of money is being diluted by fiscal default expectations caused by repeatedly record-high fiscal deficits.