Gold’s break below key technical support of 4050 to the 4023 low in New York trading on Wednesday appears driven primarily by stop-loss liquidation and positioning rather than a material deterioration in macro fundamentals, according to UBS. 

As the bank's trader Marcus Millis writes, "the move flushed out long exposure and left positioning looking more balanced, reducing the immediate risk of further forced selling."

However, he cautions, the broader trading backdrop remains challenging. That's because with front-end USD rates expected to stay under pressure, upside in gold looks limited, and rallies are still viewed as opportunities to reduce exposure rather than chase higher prices.

Near-term support should emerge around recent lows at 4040-50 with resistance at 4110/20, but conviction for a sustained rebound remains low.

That said, the long term fundamentals remain especially solid, and patient holders who would rather collect income from gold as a "productive" metal until its next breakout, rather than a passive, not-yielding asset, can check out the offerings from our partner Monetary Metals. 

Case in point: as we reported a few weeks ago when analyzing the World Gold Council's 2026 Central Bank Gold Reserves Survey, the punchline was that a record 45% of respondents expect their own gold reserves will increase over the next 12 months

Central banks have accumulated an average of 1,000t of gold over the past four years, up significantly from the 500t average over the preceding decade. This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers.

The WGC's 2026 Central Bank Gold Reserves (CBGR) survey was conducted between 5 February and 19 May. With the majority of responses coming in after the start of the Middle East conflict, this year’s survey contains insights on how central bankers view gold in the light of ongoing geopolitical turmoil. The sample is highly representative of the overall central bank community, both geographically and in terms of gold owned. This robust participation is a powerful signal of engagement with gold amongst the central banking community. 

Here are some more of the notable highlights:

• Similar to findings from previous surveys, central banks continue to hold favorable expectations on gold. Respondents overwhelmingly (89%) believe that global central bank gold reserves will increase over the next 12 months.

• This year, a record 45% of respondents expect their own gold reserves will also increase over the same period. The majority of the remaining respondents indicated they expect no change while 1% expect their institution’s gold reserves to decrease (hello, Turkey).

• Gold’s performance during times of crisis, portfolio diversification and inflation hedging are some of the key factors for central banks to hold gold. In addition, gold as a geopolitical risk hedge and gold as part of a reserve diversification policy also feature as key reasons for increasing allocations to gold.

• The majority of respondents (74%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi will remain unchanged over the same period, while gold holdings will increase.

• This year’s survey asked respondents how they would fund their new gold purchases. Half of respondents indicated through a domestic purchase program in local currency, while 38% indicated through selling existing reserve assets.

• The Bank of England remains the most popular vaulting location among respondents at 57%, though central banks continue to diversify their storage across multiple locations. Domestic storage came in second at 49%, followed by the Bank for International Settlements at 16% (a slight uptick from last year). The Swiss National Bank saw a notable decline in preference, dropping to 6% from 12% in 2025.

• A notable increase in changes to vaulting locations was observed in this year’s survey, with 9% saying they have increased domestic storage and 10% saying they have diversified overseas storage locations in the past 12 months, compared with 5% and 2% respectively in last year’s survey. The trend is also observed in future plans for vaulting, with 7% saying they plan to increase domestic storage and 9% saying they plan to diversify overseas storage locations in the coming 12 months. 

To summarize, this year’s survey reinforces the trend: central banks remain very positive on gold, highlighting its significance amid a volatile geopolitical and economic environment.

• When asked about expectations for how global central bank gold reserves will change over the next 12 months, respondents were almost unanimous, with 89% of respondents believing that official gold reserves will continue to increase (Chart 3). This sentiment was consistent across both advanced economy and EMDE respondents. It should be noted that 11% of central banks believe that gold’s proportion of total reserves would remain unchanged, up from 5% last year.  In addition, 45% of respondents thought that their own institution’s gold reserves would rise over the next year, broadly in line with last year’s finding (43%).
• Most respondents did not expect their gold reserves to change in the next 12 months. This marks a new record high in the proportion of central banks expecting to add gold to their own reserves with EMDE banks continuing to lead their advanced economy counterparts. Among EMDE respondents around half thought that their own gold reserves would increase in the next 12 months, while the other half anticipated they would remain unchanged.
• The findings highlight that gold sentiment within the central banking community remains upbeat. Expectations point to continued gold buying over the next 12 months, reflecting sustained confidence in gold’s strategic role amid evolving geopolitical and macroeconomic dynamics.

In other words, the demand fundamentals - especially among the "price-indiscriminate buyers" have never been better, and while technicals and positioning remain challenging, especially when factoring for the continued selling in gold ETFs...

... gold tends to reward patient holders in the long run (as all those who purchased it for much of the 2010s and early 2020s experienced, when the yellow metal barely moved, then rapidly 3x-ed in just one year). And while waiting, there is now an option to collect as much as 4% yield on physical, paid out as additional ounces of physical gold.