Gold’s Steepest Quarterly Rout in 13 Years Masks a Hidden Bidding War Beneath the Surface
Published on 07/01/2026 at 18:26 | Redaktion boerse-global.de
Gold has just endured its worst quarter since 2013, shedding roughly 14% of its value in the April-to-June period as the dollar strengthened and the Federal Reserve’s hawkish posture crushed any hope of near-term rate cuts. The yellow metal briefly touched a seven-month intraday low of $3,942.99 on Wednesday before a disappointing US jobs print triggered a sharp reversal, lifting it back above the psychologically important $4,000 threshold to $4,101.60 by the close — a 1.98% gain on the day.
The ADP employment report for June landed well below expectations, showing just 98,000 new private-sector jobs against a consensus range of 105,000 to 118,000. That ephemeral weakness was enough to pull gold off its worst levels, but the broader picture remains decidedly bearish. On a monthly basis the metal is still down 9.15%, and market participants now assign a 67% probability to a rate hike at the Federal Reserve’s September meeting.
Technical damage is mounting. The price has slipped below its 300-day moving average, and a so-called death cross has materialised: the 50-day moving average ($4,438.24) has fallen decisively through the 200-day line. The 100-day moving average sits even higher at $4,664.88, and the Relative Strength Index at 40.1 is approaching oversold territory without yet signalling a sustainable bottom. Annualised 30-day volatility has surged to 26.96%, underscoring the nervousness gripping the market.
Two forces are driving the selloff. The US Dollar Index stands at 101.35, making gold more expensive for buyers using other currencies, while the yield on the benchmark 10-year Treasury note has climbed to 4.46%, raising the opportunity cost of holding a non-yielding asset. Structurally, the leadership change at the Fed has added a layer of uncertainty. New Chairman Kevin Warsh announced five independent task forces on June 17 to review communication, balance-sheet management, data governance, the inflation framework and labour-market trends. With the Fed still holding $6.7 trillion in bonds, any hint of accelerated quantitative tightening would add fresh headwinds. The June dot-plot reinforced the message: virtually all policymakers expect rates to remain unchanged or move higher through the end of 2026.
Should investors sell immediately? Or is it worth buying Gold?
Yet beneath the surface, a very different story is unfolding. Central banks are hoarding gold at a pace that suggests the long-term outlook is anything but bleak. A survey by OMFIF of 74 institutions with combined assets exceeding $10 trillion found that 82% now hold physical gold, up from 71% a year ago. Some 30% plan to increase their reserves over the next one to two years, with 51% citing geopolitical risk — particularly the situation in the Middle East — as the primary motivation. Among those surveyed, 61% expect the price to trade between $5,000 and $6,000 within 12 months.
The buying is already visible in the data. China’s central bank added 8 tonnes in April, its 18th consecutive monthly purchase and the largest since December 2024. Chinese net imports surged to 317 tonnes in the first quarter, nearly three times the prior quarter’s tally, according to J.P. Morgan. Globally, central banks acquired 244 tonnes in Q1, up from 208 tonnes in the final quarter of last year, helping push total gold demand to a record 1,231 tonnes for the first three months of 2026.
Supply constraints are reinforcing the long-term case. S&P Global data show that while exploration budgets are rising, the proportion of early-stage grassroots projects has fallen to a record low. Major producers such as Barrick Gold and Newmont are prioritising expansion at existing mines, especially in Nevada, rather than developing entirely new deposits. This scarcity of new supply is underpinning valuations for select mining equities, particularly low-cost operators in Nevada, which have held steady in the C$0.30–C$0.40 range despite gold’s quarterly rout.
Analysts are split on the near-term direction. Deutsche Bank raised its third-quarter target to $4,300, while the World Gold Council sees the metal trading in a $4,100 range through the second half of the year. Goldman Sachs, by contrast, slashed its end-2026 forecast from $5,400 to $4,900, arguing that the absence of Fed rate cuts removes the primary catalyst for a sustained rally. J.P. Morgan notes that gold is limping along near its 200-day moving average of roughly $4,340, capped below its 50-day average of $4,730 — a technical no-man’s-land that reflects the tug-of-war between institutional accumulation and speculative liquidation.
Gold at a turning point? This analysis reveals what investors need to know now.
Geopolitical crosscurrents add another layer. Indirect US-Iran talks are under way in Qatar, but no breakthrough is expected imminently. The precious metal has been under pressure since late February, when the eruption of the Middle East crisis and spiking energy prices reignited inflation fears.
The next major test arrives with Friday’s nonfarm payrolls report, which is expected to show a gain of 110,000 jobs. A strong print would all but lock in a September rate hike and send gold back toward its recent lows. The Fed’s September meeting remains the decisive event on the horizon: if the dollar holds its strength, the pressure on gold is likely to persist, even as central banks quietly add to their stockpiles.
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