Despite continued investor disregard for the gold market, the price action has been exciting. The precious metal continues to rise against the grain as people keep buying small pullbacks.

Analysts point out that with expectations for the Federal Reserve's monetary policy continuing to fluctuate significantly, gold investors have every reason to take profits.

It all began last Friday, after an excellent jobs report dramatically forced the market to cancel expectations of a 50 basis point rate cut next month.

Doves in monetary policy were hit again this week, as consumer inflation rose more than expected, with the core consumer price index up 3.2% over the past 12 months.

Although investors' expectations for aggressive easing have diminished, analysts point out that the gold market is far more than a single monetary policy decision. While we may not see another 50 basis point rate cut soon, it is clear that the Fed will continue to cut rates, even with high inflation.

We can already see the impact of the Fed's monetary policy shift on global markets. According to the World Gold Council, the much-missed North American investors led the inflow of gold-backed exchange-traded funds this year.

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Last month, $1.36 billion worth of gold flowed into North American-listed funds, while the global inflow was $1.4 billion.

This is the typical price trend we see in the gold market, the World Gold Council points out, and this trend remains relatively new. Historically, gold prices have risen by 6% in the first six months of a new easing cycle.

But let's not forget that U.S. monetary policy is just one factor supporting gold. Central banks remain net buyers of gold, even though China has dropped out of the game in the past five months - at least officially.

As central bank demand continues to play a dominant role in the market, new questions arise about where all the money is going.Precious metals analyst Jan Nieuwenhuijs speculates that Saudi Arabia has purchased 160 tons of gold since 2022.

It is not hard to believe that central banks are secretly buying gold. The World Gold Council noted in its latest Global Trends report that 67% of central bank purchases were unreported in the second quarter.

Russia can now be added to the list of central banks that will secretly buy gold as part of a new extensive precious metals purchase plan.

According to an item in its federal budget draft, the Russian government is considering spending 51 billion rubles ($535.5 million) over the next three years to replenish its precious metals reserves. This will include gold, silver, and platinum group metals.

This is not the first time Russia has established platinum and rhodium reserves. In 2012, the country sold all of its PGM reserves, and it makes sense to hold key stocks as the supply of these metals increases, especially for a major producer.

Ultimately, whether due to stubborn domestic inflationary pressures, the weakening dominance of the US dollar as the world's reserve currency, or a combination of both, gold remains resilient against the US dollar.

In a world that constantly teeters on the edge of economic uncertainty, it is no surprise that investors are beginning to look for opportunities to buy gold at a discount.