Gold treads water at $4,599 as Asian buying and central bank purchases counter a rising dollar and Treasury yields, with analysts raising 2026 price forecasts despite geopolitical tensions.
Gold is treading water near $4,600 an ounce, caught between a surge in Asian demand and the gravitational pull of a strengthening dollar ahead of Jerome Powell’s final policy decision as Federal Reserve chair. The metal traded at $4,599 in London on Wednesday, having touched an intraday low of $4,555 in early Asian hours — a level that marks a 2.4% decline over two sessions.
The standoff over the Strait of Hormuz continues to rattle commodity markets. Tehran floated a proposal to reopen the strategic waterway in exchange for the US lifting its naval blockade, but President Trump rejected the offer outright. The diplomatic deadlock keeps energy supply fears alive, yet the haven bid that typically follows such geopolitical friction has been muted. Instead, rising US Treasury yields — the 10-year note climbed to 4.45% — are stealing gold’s thunder, pushing investors toward interest-bearing assets.
A Tale of Two Gold Markets
While Western funds have been pulling back, Asian buyers are stepping in with unprecedented force. Chinese gold ETFs recorded record inflows of $8.5 billion in the first quarter, equivalent to roughly 50 tonnes of bullion. That buying spree more than offset outflows from North American funds, helping to keep the metal afloat. The People’s Bank of China added another five tonnes to its reserves in March, continuing its months-long accumulation streak.
Globally, physically backed gold ETFs added 62 tonnes in the first three months of the year. The World Gold Council expects official sector purchases to reach between 700 and 850 tonnes for the full year 2026. London vaults held roughly 9,339 tonnes at the end of March, representing a stash worth nearly $1.4 trillion.
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Analysts Raise Sights Despite Price Dip
The current price sits about 11% below the January high of $5,595, but that hasn’t deterred the analyst community. A Reuters poll of 31 analysts lifted the 2026 consensus forecast to $4,916 — the highest since the survey began in 2012. Individual bank targets are even more ambitious: UBS sees $5,900 by year-end, Goldman Sachs $5,400, while J.P. Morgan and Wells Fargo both call for $6,300.
“Once expectations for stronger monetary easing return, investment demand will revive,” said Carsten Menke, analyst at Julius Baer. StoneX’s Rhona O’Connell noted that even a de-escalation in the Middle East would leave structural tailwinds intact for gold.
Powell’s Swan Song
All eyes are on Washington this evening, where the Federal Open Market Committee delivers its third policy decision of 2026. It marks Powell’s last meeting as chair; Kevin Warsh is set to take the helm on May 15, with the Senate Banking Committee voting on his nomination later today. The accompanying GDP data for the first quarter is expected to show growth of 1.8%.
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The technical picture remains neutral for now. The Relative Strength Index sits at 48, suggesting neither overbought nor oversold conditions. Key levels to watch are $4,608 as resistance and $4,581 as immediate support, with a break below opening the door to $4,555. Should the metal hold the $4,579-$4,607 zone, analysts see a path toward $4,734. A failure to do so could send it sliding toward $4,440.
The Fed’s tone on rates — whether it hints at cuts conditional on oil easing or stays vague — will likely determine which side of those levels gold tests next.
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