China’s Central Bank Purchases Anchor Gold Market

Gold prices demonstrated resilience at the start of the trading week, moving past the volatility seen in prior sessions. The primary catalyst for this renewed buyer interest is sustained demand from China's central bank. However, the market faces a significant test later this week with the release of delayed key economic indicators from the United States.

Investor attention is now shifting squarely to the U.S. economic calendar. Critical data releases, postponed due to a brief government shutdown in early February, are now scheduled for this week.

• Wednesday, February 11: The belated U.S. employment report for January.
• Friday, February 13: U.S. Consumer Price Index (CPI) inflation data.

These reports are pivotal for determining the future interest rate path of the Federal Reserve. Figures indicating a robust labor market or persistent inflation would likely diminish expectations for imminent rate cuts. Such an outcome would typically strengthen the U.S. dollar and exert downward pressure on gold, which bears no yield.

Persistent Official Demand Provides Foundation

A fundamental pillar of support for the precious metal continues to be consistent buying from the People's Bank of China (PBOC). The central bank increased its gold reserves for a 15th consecutive month in January. Official data confirms holdings rose by 40,000 fine ounces to a total of 74.19 million fine ounces.

Should investors sell immediately? Or is it worth buying Gold?

By the end of January, the total value of these reserves stood at approximately $369.58 billion. This unwavering physical demand from the official sector sends a clear signal to investors: the long-term diversification strategy among major central banks remains firmly in place.

Analyst Outlook Remains Bullish Long-Term

Despite short-term uncertainty ahead of the U.S. data, major financial institutions maintain a positive long-term view. JPMorgan has raised its price target for the end of 2026 to $6,300 per ounce. Similarly, analysts at Société Générale consider targets around $6,000 to be relatively conservative.

In the immediate term, trading is expected to be driven by caution ahead of Wednesday's and Friday's releases. The directional trend for the coming weeks will largely depend on whether the U.S. economic data affords the Federal Reserve room to adopt a more accommodative policy or compels it to maintain a tighter stance for longer.