Gold Holds Steady as Central Banks Ditch Dollar Assets While Inflation Weakens Bonds – Sprott’s Zhu

Gold holds its trading range and draws ETF inflows despite soaring bond yields, hinting at upside potential, says Sprott research director Kenny Zhu. Central bank gold buying, accelerated by Russia’s Ukraine invasion and sanctions, underpins the long-term bullish case through reduced dollar exposure.

In a Kitco News interview, Zhu highlighted ongoing positive ETF flows amid inflation and currency concerns, reflecting investor interest and a market tilt toward gains. Media chatter focuses on gold while fixed-income players chase elevated yields.

Structurally, central banks including China and emerging markets are raising gold’s share in reserves and cutting US Treasury holdings to limit dollar leverage. High yields challenge gold, yet inflation erodes bond values and boosts metal appeal. Zhu sees a soft landing or economic surprise enabling a Fed pivot to ease pressure on precious metals.