Shah, WisdomTree’s Head of Commodities and Macroeconomic Research, told Kitco News that higher bond yields and a stronger U.S. dollar have weighed on gold. Recent easing in yields and weakness in the dollar have brought prices closer to levels justified by his fundamental model, he said. That does not necessarily mean the metal is undervalued; rather, the market is finding a more sustainable footing. “Gold prices don’t have to go up $1,000 to prove their value,” Shah said.

Inflation and central-bank policy remain key near-term pressures. The U.S. Consumer Price Index rose 0.4% last month, after a 0.6% increase in September, exceeding economists’ expectations of 0.3%, according to the Bureau of Labor Statistics. Core CPI, excluding food and energy, rose 0.3%, matching September’s increase. Shah said the Middle East conflict has created an energy shock that is feeding into consumer prices and keeping monetary policy restrictive. A signal that the Federal Reserve and other central banks have finished raising rates could support gold even if inflation stays high, he said.

Shah also pointed to government debt and interest costs as enduring reasons to hold the metal. He said the Democratic sweep in the U.S. midterm elections could limit further spending and tax cuts but would not resolve existing fiscal pressures. In his view, debt could eventually lead central banks to prioritize government financing over inflation goals—a dynamic he described as “fiscal dominance.”

New institutional buyers, including Chinese insurance companies, Indian pension funds and stablecoin issuer Tether, have added to investment demand, Shah said. He cautioned that their initial allocations may have a bigger price impact than later purchases. He expects central banks, including China’s, to remain buyers, though limited transparency makes official demand difficult to measure. A sharp stock-market fall could initially pull gold lower as investors raise cash, he said, but a wider flight to safety could later benefit the metal. Lower prices may also bring back retail buyers who had been priced out.