Gold Holds at $4,521 as Central Bank Hoarding Collides with Hawkish Fed — PCE Data Next

Gold hovers at $4,521 amid tug-of-war between China's central bank purchases and US Fed's higher-for-longer stance. Key support at $4,493–$4,533; Thursday's GDP and PCE data could trigger breakout.

Gold is caught in an unusually tight grip this week, with the metal hovering at $4,521 an ounce as two powerful forces cancel each other out. On one side, China’s central bank keeps piling into the market — 260,000 ounces in April alone, its 18th consecutive monthly purchase. On the other, the US Federal Reserve’s “higher for longer” stance keeps the dollar elevated and bond yields sticky, making unyielding bullion less attractive by comparison.

The result is a sideways grind that has left the price roughly 17% below its January high of $5,450 and clinging to a year-to-date gain of about 4%. The RSI sits at nearly 50 — dead neutral — and the 50-day moving average around $4,669 acts as a stubborn ceiling.

Central bank accumulation remains the most reliable anchor in an otherwise drifting market. Beyond China, other monetary authorities are also planning to expand their gold reserves, providing a physical demand buffer that has absorbed some of the speculative selling pressure. But that buffer is being tested by macro headwinds: stubborn US consumer inflation expectations and rising real yields are raising the opportunity cost of holding gold, and the dollar’s strength continues to weigh on any recovery attempts.

Geopolitics adds another layer of unpredictability. Tensions linked to Iran and the Strait of Hormuz have prompted 27 nations to request emergency financing from the World Bank, reinforcing safe-haven flows that underpin the metal. Yet the outcome of the mid-May Trump-Xi meeting in Peking — which could ease or escalate those risks — hangs over the market, leaving the risk premium vulnerable to sudden shifts.

Technically, gold is walking a narrow ledge. The key resistance levels to watch are $4,535, which would signal a first reversal attempt, and $4,602, where the correction would technically end. On the downside, the zone between $4,493 and $4,533 is critical; a daily close below it opens the door to a slide toward $4,381. The primary article also flags a deeper test to $4,300 if the upcoming inflation data overshoots expectations.

Speaking of which, the week’s major catalyst arrives Thursday with the release of the revised US first-quarter GDP and the April PCE deflator — the Fed’s preferred inflation gauge. A hotter-than-expected reading would likely reinforce the hawkish outlook and could drive gold toward the lower support levels. Monday’s thin trading due to the Memorial Day holiday in the US may amplify volatility on any news.

The sentiment among professionals mirrors the indecision. About 62% of surveyed analysts expect consolidation or further downside in the near term, reflecting the belief that the macro headwinds still outweigh the structural support from central banks. The broader uptrend remains intact as long as the price stays above the 200-day moving average, but the room for error is shrinking. A decisive break of the $4,493–$4,533 support zone could tilt the balance decisively in favor of the bears.