Gold Stuck in the Middle: Central Bank Hoarding Fails to Lift Prices as Fed Hawks and Dollar Strength Dominate
Published on 07/10/2026 at 15:06 | Redaktion boerse-global.de
Gold continues to trade in a tight range near $4,114 an ounce, down 0.45% on the session and nursing a weekly loss of 1.75%. The precious metal has now retreated 5.25% since the start of the year and sits roughly 27% below its all-time high of $5,626.80 set on January 29, 2026. Yet the current level is only about 5% above the 52-week trough of $3,901.30 recorded in October 2025 — a testament to the persistent headwinds that have kept bullion anchored despite furious buying by central banks.
The main drag on gold remains monetary policy expectations. Data from CME FedWatch shows the market pricing in a 64% to 65% probability of a Federal Reserve rate hike at the September meeting. The latest Fed minutes revealed that nine of 18 committee members are open to further tightening before year-end. A stronger dollar, buoyed by those hawkish signals, makes the yield-free metal less appealing to international buyers. Meanwhile, geopolitical tensions in the Middle East — including reports of an alleged Iranian assassination plot against Donald Trump and recent US strikes — have pushed oil prices higher, stoking inflation fears that only reinforce the case for higher rates. That feedback loop has kept gold’s safe-haven bid in check.
Central banks, however, see the price dip as a buying opportunity. Poland’s National Bank added 18.5 tonnes to its reserves last month, bringing its total holdings to 632.4 tonnes as it works toward a stated target of 700 tonnes. Governor Adam Glapi?ski has been deliberately accumulating on pullbacks, and the unrealized profit on the stash already runs into billions of dollars. China is no less active: the People’s Bank of China purchased another 15 tonnes in June, marking the 20th consecutive month of additions and lifting its war chest to roughly 2,350 tonnes. Yet retail demand has been less enthusiastic — Indian buyers are staying on the sidelines amid volatile prices, widening local discounts, while in Shanghai the anticipated “buy-on-dip” behavior among consumers has failed to materialize, with bank-offered gold savings products seeing tepid demand.
Should investors sell immediately? Or is it worth buying Gold?
The divergence in outlook among top financial institutions mirrors the broader tension in the market. HSBC slashed its average 2026 forecast from $4,864 to $4,560 per ounce, citing dollar strength and Fed hawkishness, and now sees a trading range of $3,800 to $4,700 for the year. Bank of America was even more aggressive, cutting its 2026 target by 14% to $4,360, though it maintains a long-term goal of $5,000 on expectations of a future Fed pivot. By contrast, JPMorgan, Goldman Sachs, Deutsche Bank, Société Générale, and UBS have all left their bullish long-term price targets unchanged, with forecasts ranging from $4,900 to $6,200. Bernstein Research bucked the negative trend entirely, raising its second-half 2026 target to $4,533 on the back of robust central bank demand and a perceived low risk of exceptionally aggressive Fed tightening.
Technically, gold is navigating a tricky zone. The 14-day relative strength index stands at 43.1, below the neutral 50 threshold, while the 50-day moving average of $4,365.21 sits 5.75% above the current price. The 100-day and 200-day averages — at $4,599.20 and $4,539.04 respectively — are also well overhead, signaling that near-term momentum remains bearish. Annualized 30-day volatility has clocked in at 27.01%. With US consumer and producer price data due this week, any upside surprise could further strengthen the case for the Fed to stay the course, adding to the selling pressure on bullion. For now, the tug-of-war between official-sector accumulation and macro-driven headwinds shows no sign of resolution.
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