Central banks accumulation supports Gold consolidation

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Gold drops 0.64% today to $4,536.79

Highlights

Mounting Middle East tensions and a drone strike at a UAE nuclear plant triggered significant outflows from gold as investors reduced risk exposure.
Gold faced sustained selling pressure despite central banks adding 244 tons to reserves in Q1, as inflation risks and higher oil prices constrained policy response.
Gold trades near the lower end of its expected $4,460–$4,590 range, with bearish technical momentum and low probability of short-term recovery.

Gold outflows accelerate amid Middle East conflict and inflation fears

Gold experienced a significant outflow in response to heightened Middle East tensions and a confirmed drone strike at a nuclear power plant in the United Arab Emirates, events that escalated fears of broader regional conflict and prompted risk-averse investors to reduce gold holdings. Additional pressure was exerted by rising oil prices and persistent geopolitical escalation, which amplified inflation risks and constrained central bank flexibility, resulting in further sell-offs across non-yielding assets. While central banks increased official gold reserves by 244 tons in the first quarter in response to these uncertainties, price action has remained under broader selling pressure.

Bearish momentum persists amid technical divergence and volatility

Technically, XAU sits below the SMA-20 ($4,632.77), SMA-50 ($4,666.16), and SMA-200 ($4,596.24), with the Ichimoku Kijun at $4,658.11 providing immediate resistance. Momentum indicators, including MACD and ADX, continue to point toward a downtrend, while RSI and CCI remain in sell mode but not at extremely oversold levels. The Stoch RSI, however, signals a strong buy, and BBP is flagged oversold, highlighting a clear divergence between momentum and possible reversal signals. Awesome Oscillator readings confirm bearish momentum, daily price action includes a mild gap down, and the price is drifting towards today's lower range amid moderate intraday volatility.

Downside risk prevails as volatile channel constrains reversal

Over the next five trading days, XAU is expected to remain in a typical volatility band between $4,460 and $4,590. Probability of a near-term price increase is low (less than 20%), suggesting further decline is more likely. Baseline scenario projects sideways movement within this channel. A move above $4,590 could target resistance near $4,650, while a sustained break below $4,460 would open the way for additional losses under continued selling pressure.

Anton Kharitonov, expert at Traders Union, sees downside risks dominating gold in the near term as heightened geopolitical tensions have triggered sustained outflows and undermined investor confidence. He believes persistent inflation fears and constrained central bank actions are adding pressure, while technical charts confirm a bearish structure below major moving averages. Any rebound remains limited unless XAU climbs above key resistance levels. "Base case is sideways to lower as long as gold trades beneath $4,590 — I remain defensive until bulls reclaim higher ground."

Earlier, analysts noted that persistent technical and market factors were keeping gold under sustained bearish pressure despite increased regulatory access and central bank purchases. Recent geopolitical shocks and renewed selling confirm this downside bias, with traders now facing additional volatility and the risk of accelerated losses should price break below the $4,460 support.

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

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