Gold Fails to Recover as Central Banks Ditch Bullion
Gold has lost its safe-haven status and is struggling to recover from the fading tailwind of central banks' bullion purchases. In 2022, gold prices surged due to these purchases, but that support has since dissipated. Market sentiment has shifted, and demand for diversification has weakened.
The Middle East conflict in March 2026 caused a significant drop in gold prices, but the renewed fighting in July only led to consolidation between $3,950 and $4,160 per ounce. Every pullback towards the lower boundary attracts buying from major market participants, while failed breakouts above the upper boundary reflect a lack of fundamental support.
China's gold imports have climbed to 173 metric tons in June, their highest level since March 2024. This trend is not surprising, as lower prices tend to stimulate demand. When bullion shifts from Western investment vehicles to Asian consumers, the XAU/USD pair tends to trade in a downtrend.
The broader macroeconomic backdrop remains unfavorable. Brent crude has climbed above $100 per barrel, 10-year US Treasury yields have reached their highest level since January 2025, and the US dollar has strengthened against other major currencies as investors increasingly expect the Fed to tighten monetary policy.