Gold: Central Bank Buying Frenzy Could Ease Amid High Prices

After reviewing the movements of the gold futures in different time charts, I find that the currently prevailing geopolitical concerns, shaping up a new financial order to escape the denting impacts of Trump’s trade tariff, resulted in a panic buying mania among the global central banks between 2023 – 2025 which is about to end now as buying gold at this level could be self destructive if a central bank of any country come forward to add more gold in it reserve.

Undoubtedly, Poland’s central bank announced plans on Wednesday to increase its gold holdings to 30% of its reserve assets, aiming to strengthen the country’s financial security, while NBP already holds more than 515 tonnes of gold, which represents approximately 22% of its total official reserve assets but said the timing and volume of gold purchases would be determined by market conditions.

Undoubtedly, this news boost the bullish sentiments, prevailing in the markets that the gold futures could test $5000 levels this year or the next, but I analyze this news from all angles as the National Bank of Poland’s statement indicate its skepticism to purchase more gold at such higher price while it says that the timing and volume of gold purchases would be determined by market conditions.

I have already explained in my previous analyses that the China has already started to lessen its dollar dependence to escape the impact of Trump’s trade tariffs by introducing Petroyuan for purchasing oil from Saudi Arabia and while Russia seems to follow the same path to lessen the impact of trade tariffs while the US is trying to discourage India and some other developing countries to stop buying oil from Russia by imposing heavy tariffs upon them.

Undoubtedly, a changing economic scenario is likely to generate a new financial order, especially to avoid the denting impact of tariff trade tussles, while surging skepticism over the Supreme Court’s verdict on Trump’s plea is evident enough to overshadow the bullish moves.

Technical Levels to Watch

In a monthly chart, gold futures are facing extreme bearish pressure, after finding a breakout above the immediate resistance at $3544 but the further continuation of this move looks full of skepticism as the gold futures are already in the overbought territory since April 2025 when the gold futures formed a big indecisive candle from $3146 to $3544, and the current month’s move looks like overstretching this bubble that could bust any moment as the most of the central banks would feel reluctant to buy gold at this stage where the gold has already lost its safe have potential.

I find that if gold futures struggle to sustain above the immediate resistance at 3714, a monthly closing could be seen below the immediate support at $3544.

In a weekly chart, gold futures have tested a new high at $3714, after testing a low at $3349 on August 18, 2025 indicate a steep upward move could be a result of surging gold mania only, and this 30-day move look evident enough for the advent of a selling spree that may start next week, if the gold futures close this week below the immediate support at $3655.

Inversely, any sustainable move above the immediate resistance at $3714 will provide a good opportunity to big bears to load fresh shorts with a stop loss at $3737 for a target at $3578.

In a daily chart, gold futures are facing significant bearish pressure at the immediate resistance at $3694 and look ready for a bearish reversal, as despite repeated attempts to sustain above this immediate resistance, bulls couldn’t succeed in moving upward, as Tuesday’s move to hit a new high at $3714 has capped the upside for the futures.

I find that if the gold futures could test the immediate support at the 9 DMA at $3654 in today’s session, where a closing below this immediate support could push the futures to test the next support at $3617 next week.

In a 5-hr. chart, gold futures have formed a bearish hammer despite yesterday’s bullish moves from the day’s low at $3652, indicating this exhaustion could continue today as the next 5-hr. candle could be a bearish candle to validate the formation of a bearish hammer on Friday.

Disclaimer: Readers are advised to take any position in the gold futures at their own risk, as this analysis is only based on observations.