Gold holds steady after China central bank continues gold buying

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Gold drops 0.34% to $4,243.58 today

Highlights

The Federal Reserve's signal of possible rate hikes this year has strengthened the US Dollar and weighed on gold prices.
Persistent central bank gold purchases, notably by China, have provided a floor for demand and helped offset further declines.
Gold trades below major moving averages as bearish momentum dominates, with price expected between $4,195.84 and $4,291.32 in the coming sessions.

Fed rate outlook and central bank demand temper gold’s decline

The Federal Reserve concluded its most recent meeting with no change to interest rates, but projections showed that nine of nineteen board members anticipate at least one rate increase this year, resulting in a firmer US Dollar and reducing gold's relative appeal as a non-yielding asset. Persistent central bank gold buying, particularly by China's central bank, has continued to support underlying demand, tempering some of the downward pressure. Additionally, the ongoing US-Iran ceasefire has modestly reduced the geopolitical risk premium, limiting safe-haven flows into gold.

Weak momentum and resistance cap gold amid persistent selling

On the H1 chart, XAU trades below its MA-20 ($4,291.80) and MA-50 ($4,317.77), while the daily close remains under the MA-200 at $4,643.11. Immediate resistance is defined by the Ichimoku Kijun at $4,301.82, with price showing no break above. Momentum is weak: MACD and Awesome Oscillator both indicate a sell signal, ADX stands neutral, and RSI reads 33.68 (sell), while Stoch RSI, CCI, and BBP all reflect oversold or strong seller-controlled conditions.

Downside risk dominates as low reversal odds meet tight range

In the very near term, XAU is expected to fluctuate within the $4,195.84 to $4,291.32 band, a range matching typical volatility for the period. The probability of an upside reversal is low, with a higher likelihood of renewed pressure toward support. An upward scenario would require a sustained move above $4,301.82, while deeper losses could occur if the lower boundary is breached and sellers accelerate outflows.

Anton Kharitonov, expert at Traders Union, sees continued pressure on gold as technical and fundamental signals align to the downside. He notes that the Federal Reserve’s policy stance and firm US Dollar limit gold’s appeal, while heavy selling is confirmed by weak momentum indicators and oversold readings. The lower boundary at $4,195.84 is key for near-term direction, with only substantial strength above $4,301.82 reversing the bias. "Until XAU regains $4,301.82, rallies are suspect and fresh downside remains my base case."

Earlier, analysts noted that gold was caught in a period of technical consolidation, driven by mixed geopolitical developments and shifting central bank reserves. The current environment reinforces this cautious tone but with momentum and sentiment now tilting further bearish, traders should monitor for a potential breakdown below the $4,195.84 support as renewed selling could accelerate losses in the near term.

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.