Gold physical demand rises: Can XAU regain momentum?

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Gold drops 0.5% today to $4,120

Highlights

Central banks continue to buy physical gold to reduce reliance on foreign currencies and manage long-term fiscal risks.
These ongoing institutional purchases create a stable demand base, but gold prices remain pressured by higher U.S. Treasury yields and a stronger dollar.
Gold trades below key moving averages with bearish momentum indicators, with price expected to range from $4,092 to $4,148 and little chance of near-term rebound.

Central bank buying offsets headwinds from stronger dollar and yields

Central banks have continued to purchase physical gold as part of efforts to limit exposure to foreign fiat reserves and mitigate long-term fiscal debt risks, according to FXLeaders. This institutional demand introduces a non-speculative flow supporting the asset, even as broader macro factors such as higher U.S. Treasury yields and a stronger U.S. dollar present headwinds. These steady purchases have acted as a stabilizing factor for gold, though price action has remained under broader selling pressure.

Resistance levels and negative momentum signal ongoing intraday selling

Short-term moving averages on the H1 chart indicate resistance at $4,133 (MA-20) and $4,155 (MA-50), while the MA-200 on the daily timeframe stands significantly higher at $4,421. The Ichimoku Kijun level at $4,144 reinforces immediate resistance. Momentum indicators remain negative, with MACD and ADX both suggesting ongoing selling, while RSI at 40.76 and CCI both confirm a sell bias. Stochastic RSI and the Awesome Oscillator are neutral, but Bull/Bear Power readings continue to show sellers dominating intraday dynamics.

Sideways movement expected as resistance and support shape outlook

Over the next 2–3 days, gold is likely to fluctuate within the $4,092 to $4,148 range, with typical volatility expected for the period. The baseline scenario anticipates sideways action limited by resistance at $4,144 and support at $4,092. A breakout above $4,144 could trigger a short-term bullish move, while a decline below $4,092 would likely lead to renewed pressure and further losses.

Anton Kharitonov, expert at Traders Union, sees the gold price action as under pressure despite steady institutional demand from central banks. He notes that the technical setup shows strong resistance and persistent selling momentum, with little indication of any near-term reversal. The fundamental bid from central bank purchases provides only limited downside support as bearish forces remain dominant. "Until Gold reclaims resistance above $4,144, I see no tactical long opportunities and remain defensive."

Earlier, analysts noted that gold remained pressured by elevated Treasury yields and persistent inflation concerns, despite some support from geopolitical tensions. The current analysis highlights that ongoing central bank purchases now act as a stabilizing force against macro headwinds, making the $4,144 resistance a critical level to watch for near-term breakout potential.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.