On September 28, 2022, the dollar index hit a twenty-year high, Treasury yields were surging, and the Federal Reserve was in the middle of the most aggressive hiking cycle in forty years. Gold fixed at $1,618 that morning, the low of the entire cycle. Six and a half months later it was above $2,040, a gain of about 27 percent, and the Fed had raised rates at every meeting in between. This week the same three readings are at or near their cycle peaks again: a 10-year yield near a two-decade high, a Fed that has just confirmed another hike is coming, and a dollar index at an 18-month high. Gold is near $4,129 and still up on the year. Here is why that combination has historically marked a bottom, not a breakdown.
Key Takeaways
- The three forces that push gold down, high yields, a hiking Fed, and a rising dollar index, are all at or near their strongest readings of this cycle at the same time.
- Gold trades near $4,129, off about 6 percent for the month and about 26 percent under its January record, yet nearly 4 percent higher than a year ago.
- When this same trio peaked on September 28, 2022, gold put in its low that day and gained about 27 percent by April 2023 while the Fed kept hiking at every meeting.
- China's central bank bought 740,000 ounces in September, a 23-month streak and the largest single-month purchase since 2023, and each month since July has been bigger than the last.
- Gold and silver pay no interest or dividend, and their value changes. This is market commentary, not financial advice.
The Day Everything Was Against Gold
Go back four years. In the autumn of 2022 inflation was running above 8 percent, and the Fed was raising rates by three-quarters of a point at a time. The 10-year Treasury yield was climbing toward 4 percent for the first time since 2008. The dollar index, which measures the dollar against the euro, yen, pound, and other paper currencies, touched roughly 114 on September 28, the highest reading since 2002.
Every commentator on television said the same thing that week: with yields rising and the dollar index at a twenty-year high, there was no reason to own gold.
Gold's morning fix on September 28, 2022 was $1,618.20. It was the low for the year. It was the low for the cycle.
What followed is the part that matters. Gold closed 2022 above $1,800. By April 13, 2023 it fixed at $2,048.45, about 27 percent above the September low. And the Fed never paused during that run. It raised rates in November, December, February, March, May, and July, lifting the funds rate from just over 3 percent to 5.25 percent. The metal did not wait for permission. It turned on the day the dollar index stopped rising, and it did not look back.
At Kingsley Gold Group we point clients to that episode often, because it corrects the most common mistake in gold investing: waiting for the headwinds to disappear. They never disappear. They peak.
The Same Three Readings, Today
Now look at this week.
The 10-year yield sits in the 5.2 to 5.3 percent range, the loftiest it has been in more than twenty years. That is the most direct competitor gold has: a government bond paying 5 percent makes a metal that pays nothing look expensive. But the economy underneath that yield is softening. September payrolls came in at 29,000 against expectations near 90,000, and unemployment ticked up to 4.2 percent. Five percent borrowing costs and 29,000 jobs a month do not coexist for long.
The Fed released minutes from its September meeting this week. Every one of the 19 officials voted for the quarter-point increase, and a majority see one more coming before year-end. Futures markets price a December increase at better than 80 percent. That is a central bank at maximum hawkishness, and maximum is the operative word. A Fed one hike from done has almost nothing left with which to surprise the market.
The dollar index is at its highest reading in 18 months. Be careful with what that means. It does not mean the dollar in your checking account buys more than it did; its purchasing power has kept falling. It means the euro, yen, and pound have been losing value faster. Still, a rising index is a headwind for gold, and 18-month highs in it have tended to mark exhaustion.
Three headwinds, each near its limit, all at once. Gold has given back 6 percent this month. It is still above $4,100, and it is still higher than it was a year ago. In September 2022 the same configuration produced a bottom within hours.
Download the free Kingsley gold and silver guide for the full case.
Who Is Standing Under the Market
The buyers who matter most in gold do not read Fed minutes. They buy on a ten-year horizon, in size, every month, and the largest of them just stepped up.
The People's Bank of China bought 740,000 ounces in September. That makes 23 months in a row, and it is the most the bank has added in any month since September 2023. The buying has grown every month since summer, from 640,000 ounces in July to 650,000 in August to 740,000 last month. China now reports 77.47 million ounces, close to 2,400 tonnes, and its biggest purchase in three years arrived in the month the price was falling.
China is the loudest example of a worldwide pattern. Official-sector buying has run near 1,000 tonnes annually since 2022, and gold now makes up a larger share of global reserves than US Treasuries do. The institutions whose job is to hold the safest assets on earth compared a 5 percent Treasury with a $4,100 ounce and kept choosing the ounce. That demand does not care about the dollar index, it does not sell on a Fed headline, and it is the floor under this market.
The Gap Between Here and the Targets
Gold's record is $5,589.38, set on January 28. At $4,129 the metal is about 26 percent below it, while every force that produced the record has strengthened: central bank accumulation is accelerating, the federal debt keeps growing, and the economy is slowing into 5 percent rates.
The published bank targets have not moved down. JPMorgan has carried a year-end 2026 target near $6,000 with $6,300 flagged into 2027. Bank of America has pointed to $6,000 within twelve months. UBS sits in the $5,200 to $5,900 range. Measure the most restrained of those against $4,129 and the distance is substantial.
Silver tells the same story with more amplitude. It trades near $59, off about 12 percent for the month yet nearly 20 percent higher on the year, and the ratio of gold to silver stands close to 70. Silver travels further than gold in either direction, and when gold turned in late 2022 silver made the trip faster. Gold is the anchor. Silver is the acceleration.
Learn how a tax-free 401(k)-to-gold rollover works, or call (888) 604-9276.
Positioning a Retirement Account for the Turn
The hard part about buying a bottom is that it never feels like one. It feels like this week: the headlines are against you, the price is down on the month, and the people who understand the market are quietly adding.
Physical gold and silver can sit inside a retirement account. Moving a 401(k), 403(b), TSP, or existing IRA into a self-directed precious metals IRA by direct rollover triggers no tax and no early-withdrawal penalty when an approved custodian runs the transfer. Most of our clients move a portion of a balance rather than all of it, and the coins and bars are held in their name at an insured depository.
The Bottom Line
In September 2022 the dollar index, Treasury yields, and the Fed all peaked together, and gold bottomed that day before rising 27 percent through a full run of further rate hikes. This week yields sit at a two-decade high, the Fed has signalled one more hike, and the dollar index sits at an 18-month peak. Gold remains above $4,100 and higher than a year ago, and the biggest official buyer on earth just made its largest purchase in three years, straight into the dip.
Gold and silver pay no interest or dividend, and their value moves with the market. They are one component of a diversified retirement plan, not a substitute for one, and this article is general information rather than financial advice. The right allocation depends on your circumstances. To talk through adding physical metal to a retirement account, call Kingsley Gold Group at (888) 604-9276.
Frequently Asked Questions
Why did gold rise in 2023 while the Fed was still raising rates?
Markets price rate hikes before they happen. By late September 2022 the dollar index and yields had already reached levels that reflected the full hiking path, so once they stopped climbing, gold had nothing left to fear. It rose about 27 percent from the September 28, 2022 low to April 2023 while the Fed hiked at six consecutive meetings.
What does the dollar index measure?
It measures the dollar's exchange value against a basket of other paper currencies, mainly the euro, yen, pound, Canadian dollar, Swedish krona, and Swiss franc. A high reading means those currencies have weakened relative to the dollar. It says nothing about what the dollar buys at home, which has kept declining.
How far is gold below its record?
Gold's all-time high is $5,589.38, set on January 28, 2026. At about $4,129 the metal is roughly 26 percent below that level.
Is China still buying gold?
Yes. The People's Bank of China bought 740,000 ounces in September 2026, extending its streak to 23 months with the most it has added in a single month since September 2023. Reported holdings are 77.47 million ounces.
Why does silver fall more than gold in a pullback?
Silver is a smaller market with heavy industrial demand, so it moves further than gold in both directions. That amplitude is why savers who hold metals hold both: gold anchors the position and silver covers more ground when the trend turns higher.
Can I hold physical gold in a retirement account?
Yes. A self-directed precious metals IRA funded by direct rollover from a 401(k), 403(b), TSP, or existing IRA holds physical coins and bars in your name at an insured depository, and the rollover itself is not taxed when an approved custodian runs it. Call (888) 604-9276 to see how it works.
Related Reading
- Gold rose into a rate hike. The reason is in the Fed's own numbers
- Gold's best decade came from an inflation the Fed could not reach
- Is now a good time to buy gold? What the dip and central banks are telling you
Take the Next Step
- Download the free gold and silver guide
- Learn how a tax-free 401(k)-to-gold rollover works
- Open a gold and silver IRA
- Request a free retirement portfolio review
- Call a Kingsley advisor at (888) 604-9276
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