Gold Hovers at a Crossroads as Central Bank Buying Spree Runs Into China’s Retail Exodus
Published on 06/26/2026 at 05:01 | Redaktion boerse-global.de
Gold is locked in a tug-of-war between two powerful forces that are pulling in opposite directions. On one side, central banks have piled into the metal at a record pace, snapping up 244 tonnes net in the first quarter of 2026 alone. On the other, a wave of bearish headwinds — ranging from a hawkish Federal Reserve to the abrupt closure of China’s retail gold trading channels — is threatening to push prices back toward the 52-week low of $3,901.30. The result is a market that has stabilized near $4,050 but remains deeply fragile.
The latest rally above the psychologically important $4,000 mark was triggered by a surprise dovish pivot from the US central bank. New inflation data for May showed the core rate at 3.4% and the headline figure at 4.1% — the highest in three years, yet exactly in line with market expectations. Rather than fueling fears of tighter policy, the data eased concerns that the Fed would adopt an even more aggressive stance. The dollar index immediately slid to 101.39, providing a tailwind for gold priced in other currencies. Thursday’s close came in at $4,049.70.
But the reprieve may prove temporary. Fed Chair Kevin Warsh has already signaled a willingness to raise rates further if needed, and futures markets now price in a better-than-60% probability of a hike in September. A strong dollar historically spells trouble for gold, and the greenback remains supported by robust US growth — first-quarter GDP was revised upward significantly, compounding the inflation pressure.
Should investors sell immediately? Or is it worth buying Gold?
Adding to the gloom, structural demand from Asia is about to take a direct hit. Several major Chinese banks, led by ICBC, are halting gold trading for retail customers starting in July 2026, citing high volatility and stricter risk controls. The move could choke off a key source of buying from the world’s largest gold consumer, just as the metal needs all the support it can get.
Geopolitical risks, which often underpin safe-haven flows, have also faded. Tensions around Iran had earlier drawn some buyers into gold, but the normalization of shipping traffic through the Strait of Hormuz and a US sanctions exemption on Iranian oil have dampened those fears. The flight to safety has evaporated.
Against this fractured backdrop, institutional investors are acting as an increasingly dominant counterweight. A new World Gold Council survey reveals that nearly half of all central banks intend to add to their gold reserves over the next year — a record proportion. Almost three-quarters of respondents expect the dollar’s share of global reserves to decline. Gold already accounts for 27% of reserve assets, outpacing US Treasuries at 22%. The buying spree led by Poland and China in the first quarter underscores that trend is accelerating.
The technical picture, however, offers little comfort. The price has fallen 10.22% in the past month and sits 28.08% below its all-time high. The Relative Strength Index has dropped to 33, deep in oversold territory, which attracted some bargain hunters. Yet the metal remains well below both its 50-day and 100-day moving averages — the 50-day currently sits near $4,496. Unless gold can reclaim that level, the downtrend is far from broken. The 52-week low of $3,901.30 looms as the next critical test; a breach there would likely trigger a fresh wave of selling.
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