Gold Forecast: China Extends Buying Streak as Fed Minutes Put $4,190 in Focus

What to Know

• The People’s Bank of China increased its gold holdings for the 23rd month in a row in September.
• China’s official gold holdings rose to 77.47 million ounces in September from 76.73 million ounces in August.
• World Gold Council data showed official-sector gold purchases totaled 39 tonnes in August, taking year to date purchases to 170 tonnes.
• The September FOMC meeting minutes are due Wednesday, with markets watching for clues on how policymakers assessed the economy.
• Expectations around U.S. rates remain central for gold and silver as traders weigh labor-market softness and moderating inflation.
• Markets see an over 85% probability of an interest rate increase at the December FOMC meeting.
• Gold is trading around $4,142 on the 2-hour chart, holding above $4,112 support after another rejection from the $4,160 to $4,190 resistance zone.
• Silver is trading around $60.84 on the 2-hour chart and remains below the $61.72 resistance area.
• The Silver Institute expects 2026 to mark a sixth straight annual silver deficit of 46.3 million ounces, with total demand forecast to fall 2% to 1.11 billion ounces.

China’s Gold Accumulation Reinforces Reserve Diversification Theme

Gold remains in focus as central-bank demand, Federal Reserve policy expectations, and technical resistance levels converge. Data released Wednesday showed that the People’s Bank of China added to its gold reserves for the 23rd consecutive month in September. Official holdings increased to 77.47 million ounces from 76.73 million ounces in August, extending a long-running accumulation trend that market participants continue to view as part of Beijing’s strategic reserve diversification rather than a short-term attempt to influence price action.

The persistence of China’s gold buying matters because official-sector demand has become one of the strongest structural themes in the bullion market. Central banks often hold gold as a reserve asset because it does not carry the credit risk of a sovereign bond and can serve as a hedge against currency volatility, financial stress, or geopolitical uncertainty. While day-to-day price action is still heavily shaped by real yields, the U.S. dollar, and Federal Reserve expectations, continued official-sector accumulation can provide an important backdrop for longer-term investor sentiment.

China is not alone in adding to reserves. World Gold Council figures showed that official-sector purchases totaled 39 tonnes in August, taking year to date purchases to 170 tonnes. That pattern suggests that demand from central banks remains relevant even as traders focus on short-term catalysts such as the Federal Reserve minutes and the next major inflation or labor-market signals. For bullion bulls, continued reserve accumulation helps support the argument that physical demand remains resilient. For bears, the immediate challenge is that technical structure has yet to confirm a sustained recovery.

Fed Minutes Move to Center Stage for XAU/USD

The minutes from the September FOMC meeting are set for release Wednesday, and markets will examine the language closely for signs of how policymakers adjusted their views on growth, inflation, and the labor market. A slowdown in the U.S. labor market and moderating U.S. inflation have been the main drivers behind expectations that the FOMC will not increase interest rates at its October meeting. For gold, that matters because lower rate expectations can reduce the opportunity cost of holding a non-yielding asset.

However, the policy backdrop is not one-way. Markets are still pricing in an over 85% probability of an interest rate increase at the December FOMC meeting. That leaves gold exposed to any language suggesting policymakers remain uncomfortable with inflation or are not yet ready to rule out additional tightening. Earlier this week, Federal Reserve Bank of Kansas City President Jeffrey Schmid said further increases in the Fed’s policy rate may still be warranted to keep inflation in check, reinforcing the idea that the central bank debate is not settled.

For traders, the immediate question is whether the minutes validate the softer-rate narrative or revive concern that policy could stay restrictive for longer. Gold often reacts sharply to shifts in rate expectations because Treasury yields and the dollar can adjust quickly when investors reassess the path of policy. A more cautious Fed tone could help gold defend support, while a more inflation-focused message may strengthen sellers near resistance.

Gold Technical Outlook: $4,112 Support Holds, $4,160 Caps Recovery

Gold is trading at approximately $4,142 on the 2-hour chart, holding above the $4,112 support area after another rejection from the $4,160 to $4,190 resistance area. Technical traders continue to treat that upper zone as the first major recovery test. The broader structure remains bearish because price is still below both moving averages and a descending trendline, while recent rebounds have produced lower highs.

The first resistance area remains $4,160. A clear break above that level would be notable and could open the way toward $4,190, followed by $4,214 and $4,238. These levels are likely to matter because they represent areas where short-term traders may reassess momentum and where sellers could attempt to re-enter. A recovery above $4,214 would strengthen the bullish case and suggest that the market is doing more than simply bouncing within a bearish structure.

On the downside, $4,112 is the first support level to watch. A break below that area would tilt the near-term picture more firmly toward sellers and bring $4,073 and $4,030 into focus. Momentum signals still lean cautious, with RSI below the 50 center line. As long as gold remains under the descending trendline and below the key resistance zone, some chart watchers are likely to view rallies as vulnerable unless buyers can force a decisive breakout.

Silver Market Faces Tight Supply but Softer Fabrication Demand

Silver is also sensitive to Federal Reserve policy, but its physical market has an additional layer of complexity because it is both a precious metal and an industrial input. The Silver Institute expects 2026 to represent a sixth straight annual deficit of 46.3 million ounces, according to its April World Silver Survey 2026. Total demand is forecast to fall 2% to 1.11 billion ounces, showing that a deficit can persist even when some areas of consumption soften.

The demand mix is shifting. Industrial demand is forecast to fall 3%, while coin and net bar demand is expected to jump 18%. That contrast highlights a key feature of silver: investment buying can partially offset weakness in fabrication demand. Reports that solar manufacturers are accelerating thrifting and substitution away from silver in photovoltaic applications have weighed on expectations for one important industrial channel, but other demand areas remain in view.

The Silver Institute expects grid expansion, growing AI data centers, and automotive electronics to be positive growth areas for silver demand. These themes matter because silver is widely used in electrical and electronic applications. Even so, the price outlook remains tied not only to long-term demand narratives but also to short-term technical levels and the same interest-rate expectations that influence gold.

Silver Technical Outlook: $61.72 Remains the Line to Beat

Silver is currently around $60.84 on the 2-hour chart after pulling back from a challenge of the $61.72 resistance area. Price remains below the moving averages and a bearish trendline, while also trading within the lower range of a larger bearish structure. That setup keeps sellers in control unless buyers can reclaim important resistance.

A break above $61.72 would provide an initial upside signal and could put $63.06 and $65.09 in play. Until then, many technical traders are likely to remain cautious on silver’s near-term recovery attempts. Support is expected near the $60 area and below that at $59.96. If sellers push price below $59.96, attention would turn toward $58.94, with additional support possible at $57.64.

Momentum is still subdued, with RSI in the lower range. That suggests momentum may be slightly in favor of the sell-side. The market remains generally bearish below the $61.72 resistance area and the bearish trendline. A break above $63.06 would challenge that view, while a move below $59.96 would strengthen the case for a deeper test toward $58.94.

Market Takeaway

Gold’s fundamental backdrop remains supported by central-bank accumulation, especially China’s continued reserve buying, but the short-term chart has not yet confirmed a bullish reversal. The Fed minutes could become the next catalyst if they shift expectations around policy timing. For now, $4,112 is the key support level, while $4,160 and $4,190 define the immediate recovery zone. Silver faces a similar policy-sensitive setup, but its physical market story is shaped by investment demand, industrial softness, and expectations for another annual deficit.

FXCOINZ views the near-term setup as a test of whether macro support can overpower bearish technical structure. Gold bulls need a clean move above resistance to regain confidence, while bears need a break below support to confirm renewed downside pressure. Silver traders face a comparable decision point, with $61.72 acting as the ceiling that buyers must clear and $59.96 acting as the support that sellers need to break.

Frequently Asked Questions (FAQs)

Why is China’s gold buying important for the market?

China’s continued gold accumulation signals that reserve diversification remains a strategic priority. The People’s Bank of China increased holdings for the 23rd consecutive month in September, reinforcing the view that official-sector demand is still an important support for the broader gold market.

How much gold did China hold in September?

China’s official gold holdings rose to 77.47 million ounces in September from 76.73 million ounces in August. That increase extended a long-running buying streak by the central bank.

What role do the Fed minutes play for gold?

The September FOMC minutes may help traders understand how policymakers viewed the economy, inflation, and the labor market. Gold is sensitive to these signals because interest-rate expectations influence yields, the dollar, and the opportunity cost of holding bullion.

What is the key support level for gold?

The key near-term support level for gold is $4,112. A break below that area would give sellers a stronger technical edge and bring $4,073 and $4,030 into focus.

What resistance levels matter for gold?

The first major resistance level is $4,160, followed by $4,190, $4,214, and $4,238. A move above $4,214 would add more weight to the bullish recovery case.

Why is silver under pressure despite deficit expectations?

Silver remains pressured because price is below key moving averages and a bearish trendline, while some fabrication demand is expected to soften. At the same time, investment demand and other industrial uses may offset part of that weakness.

What is the key silver resistance level?

The key silver resistance level is $61.72. A break above that area could open the door to $63.06 and $65.09, while failure below it keeps the near-term tone cautious.

What silver support levels are traders watching?

Silver support is expected near the $60 area and at $59.96. If $59.96 fails, traders may focus on $58.94 and then $57.64.

Is the near-term outlook bullish or bearish for gold and silver?

The near-term technical outlook remains cautious while gold stays below its descending trendline and silver remains under $61.72. However, central-bank gold demand and silver investment demand continue to provide important market support themes.