After several weeks of consolidation and negative technical signals, gold recorded a recovery of nearly $240 in just a few sessions. The move could represent something deeper than a simple temporary market rebound.
One of the main forces behind gold continues to be central bank demand. According to the analysis, the value of their official gold reserves may have already surpassed their holdings in U.S. Treasury bonds.
Over the past four years, central banks purchased close to 1,000 tons annually. The search for protection against crises, inflation, and geopolitical risks continues to drive this strategic accumulation of the metal.
At the same time, many monetary authorities expect the dollar’s share of international reserves to decline over the coming years. This does not imply its disappearance, but rather a gradual diversification that is favorable for gold.
In the futures markets, the rise appears to have been driven mainly by the closing of bearish positions. Many traders had to quickly buy back after the price refused to continue falling.
Although exchange-traded funds are still showing capital outflows, the price has shown resilience. Demand from central banks and Asian buyers could be absorbing the selling pressure and preparing the ground for a broader recovery.
