Gold Holds Ground Above $4,100 as Central Bank Demand Offsets Hawkish Fed Signals
Published on 07/10/2026 at 11:53 | Redaktion boerse-global.de
The gold market is navigating a tug-of-war between two dominant forces. On one side, central banks are stockpiling bullion at a record pace, driven by geopolitical hedging and reserve diversification. On the other, the Federal Reserve’s latest minutes have rekindled fears of another rate hike, creating headwinds for the non-yielding metal. Spot gold settled near $4,115 per ounce on Friday, modestly down on the week but showing clear signs of stabilization after four weeks of losses.
The World Gold Council’s latest survey of global central banks underscores just how intense the buying appetite has become. A full 89 percent of institutions expect total gold reserves to increase over the next twelve months, while 45 percent plan to expand their own holdings — both all-time highs in the survey’s history. In May alone, net central bank purchases totaled 41 tonnes, a figure that would have been even larger if not for minor sales by Russia (6 tonnes) and Turkey (3 tonnes).
Poland continues to lead the charge. The National Bank of Poland added another 18.5 tonnes to its reserves last month, bringing its total to 632.4 tonnes. Governor Adam Glapi?ski has made clear that the central bank is deliberately buying on price dips, with a stated target of 700 tonnes. The strategy has already generated billions in unrealized paper gains. China is not far behind: its central bank acquired 14.93 tonnes in May, marking the twentieth consecutive month of purchases. Meanwhile, Singapore resumed buying for the first time since September 2025, adding 4 tonnes.
Should investors sell immediately? Or is it worth buying Gold?
The macroeconomic backdrop, however, remains a stubborn counterweight. The US consumer price index hit 4.2 percent in May — the highest in three years — though the core rate moderated on a monthly basis from 0.4 to 0.2 percent. The latest Federal Reserve minutes revealed that nine of the 18 committee members are open to one more rate increase before year-end. Markets are pricing a 65 percent probability of a hike in September. That prospect has prompted several banks to trim their near-term gold forecasts. HSBC lowered its 2026 projection to $4,560 per ounce, while Bank of America cut its target to $4,360. Both cited a strong US dollar and persistent inflation as key reasons. Yet the longer-term outlook remains robust: Goldman Sachs sees gold at $4,900 by year-end, and UBS believes $6,200 is achievable over time.
Private investors are also re-entering the market. In Germany, the number of gold buyers jumped nearly 18 percent in June, many taking advantage of the recent correction to build positions. On the charts, gold has reclaimed its 20-day moving average, signaling that the downtrend is losing momentum. A Friday intraday high of $4,131.54 briefly tested resistance. The $4,100 area is now acting as a near-term floor. One cautionary note, though: trading volume during this recovery remains below the levels seen during the prior selling waves, leading some analysts to question the durability of the bounce.
For now, the combination of voracious central bank buying — particularly from Poland and China — and a pickup in retail demand appears to be providing a solid floor under prices. The real test will come when fresh US inflation data lands next week. A higher-than-expected reading could push rate-hike expectations even higher and renew selling pressure. But with official-sector appetite at an all-time high, any significant downside below $4,000 looks increasingly unlikely.
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