Gold is entering the week battered by losses, stemming primarily from a hawkish Fed. Yet, China's central bank is buying, providing a floor as markets brace for Thursday's critical PCE print
Gold is entering the week, saddled with three consecutive weeks of losses, Goldman Sachs' toned down expectations for the commodity, and a hawkish Fed breathing down its neck. Yet underneath the surface, China's central bank is quietly buying at a pace that has analysts at JPMorgan and UBS refusing to abandon the bull case entirely. The setup heading into Thursday's PCE print is as binary as it gets.
Monday has so far been largely positive with Gold prices up around 0.5% heading into the US open.
Three Weeks of Pressure — What's Driving the Selloff
Spot Gold closed Friday at $4,150/oz — its lowest level since June 11 and down sharply from its January all-time high of $5,589. The 17% decline since that peak traces back to one transmission mechanism: higher real yields.
The U.S.-Iran conflict disrupted the Strait of Hormuz in late February, sending oil above $110 per barrel and energy costs up 23.5% year-on-year. That pushed headline CPI to 4.2% in May — the hottest reading since April 2023, killing any remaining case for Fed rate cuts. A blowout May NFP print of 172,000 jobs (consensus: ~80,000) delivered the knockout blow to easing expectations.
The result: the 10-year Treasury yield is now hovering at 4.483%, and the 30-year has touched 4.919%, levels that make non-yielding gold increasingly expensive to hold.
US 30Y Government Bond Yield, June 22, 2026
Source: TradingView
Kevin Warsh's debut FOMC meeting last week sealed the hawkish pivot. Nine of 18 policymakers now pencil in at least one rate hike in 2026, with markets pricing roughly 70% odds of a September move.
Goldman Sachs responded swiftly, cutting its year-end gold target from $5,400 to $4,900/oz.
China's May Buying Spree — The Structural Floor
Here's where the bear case gets complicated. While Western investors were busy pulling back, China’s central bank went in the exact opposite direction. In May, they launched a massive buying spree, snapping up 163 tonnes, marking their highest monthly acquisition since March 2024.
The People's Bank of China accelerated purchases precisely at the moment gold was testing multi-month lows, a pattern consistent with the broader trend of central banks treating price weakness as an accumulation opportunity rather than a warning sign.
The World Gold Council reported net central bank purchases of 244 tonnes in Q1 2026 alone. While the headline pace has moderated from 2024-25 peaks, partly due to Türkiye's 60-tonne sale in March, China's May activity reinforces that the structural bid from the official sector remains intact.
For futures traders, this represents a meaningful demand floor that limits the downside on aggressive short positions.
The Wall Street Split
Goldman's forecast cut to $4,900 stands in stark contrast to where JPMorgan and UBS are anchored:
- JPMorgan: $6,000/oz year-end target — the most bullish major-bank call on the street, premised on Iran deal clarity removing the rate-hike overhang and central bank demand reasserting itself in H2.
- UBS: Quarterly markers of $5,200 (June), $5,400 (September), $5,900 (December) — structurally constructive but acknowledging near-term headwinds from elevated yields.
- Goldman Sachs: $4,900 year-end — the base case now reflects a Fed that hikes at least once and keeps real yields elevated through Q3.
The $1,100 gap between Goldman and JPMorgan is essentially a bet on a single variable: whether the Fed hikes. A hot PCE print Thursday narrows that gap fast, in Goldman's direction.
The Week Ahead — PCE Is the Pivot
The May PCE release is the most consequential data point for gold this week. Core PCE is expected to tick higher from April, according to FactSet consensus. A print that confirms inflation persistence will likely push September hike odds above 80%, adding another leg of pressure on GC futures and dragging spot gold toward the $4,005 support zone.
A softer surprise, the only scenario that gives the JPMorgan bull case near-term oxygen — would need to show meaningful deceleration in core services inflation, currently the stickiest component. That's a high bar given the May CPI data already on the books.
Gold Futures Four-Hour Chart, June 22, 2026
Source: TradingView
Looking at the H4 Gold chart, it does maintain a clear bearish structure. The only silver lining is that price does appear to have printed a higher low.
Price action remains firmly below both the 100 SMA ($4,356.9) and 200 SMA ($4,477.8), confirming a dominant downtrend.
Currently trading at $4,209.4, the immediate bias remains heavily skewed to the downside. Expect a potential retest of the major June lows near $4,060 unless bulls can stage a massive reversal and reclaim the $4,368.1 resistance level.