Gold held near $4,210 on Tuesday morning even as the dollar index hit its highest level since April 2025. An Investing.com analysis argues the same divergence preceded September's one-day slide, and that gold's reaction is likely delayed rather than cancelled.
Gold settled $25.70 lower at $4,190.60 on Monday, while the USD Index broke out to 102.59. The analysis argues that gold staying above its lows while the dollar makes new highs looks like delayed selling rather than real strength.
Oil drives the dollar, not the Fed
The analysis says oil drove much of the breakout: Europe and Japan pay for imported oil in dollars, so higher oil means more euros and yen sold. The euro fell to about $1.1158, and the index sat near 102.35 on Tuesday morning.
Gold fell 0.61% on Monday, more than the dollar's 0.37% rise. But the source of the dollar's strength matters. December hike odds are near 85%, about where they were a week ago, and gold trades on the rate channel more than on currency flows.
September set the precedent
Between September 14 and September 24, the USD Index rose from below 99.5 to 101.09, while gold held a range between roughly $4,300 and $4,440. Then, on September 28, gold fell $152.80 in one session, its worst day of 2026, with the dollar up about 0.1%.
The author does not see confirmation of strength now. Silver outpaced gold on Friday's bounce, the same behavior it showed six times in ten sessions before the September slide, and the miners gave back Friday's gains about three times as fast as gold on Monday morning.
ETF inflows do not change the outlook
Gold-backed ETF inflows have reached a four-year high, according to Bloomberg data cited in the analysis. The author says that fits a bearish outlook because ETF flows follow the price and headlines, and investors can sell as quickly as they bought.
The author also points to 2012 and 2013. Global gold ETF holdings reached a record 2,632 tonnes in December 2012, and ETFs saw net redemptions of about 800 tonnes in 2013, which fed a slide from about $1,800 to about $1,200.
Source: Investing.com
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