Gold is breaking above the downtrend and consolidation range that formed in late January 2026, according to BIT Research, which said the metal may have completed its basing process after holding above $4,000 and moving through $4,200. The report said the move is getting support from shifts in Federal Reserve expectations, continued central bank buying and changes in Asian demand.
Fed expectations shift toward a September hold
BIT said recent policy signals from Fed Chair Wosch were more hawkish than the market had expected, but the late-July Federal Open Market Committee meeting showed limited support for another rate increase. Only 3 of the 12 voting members backed a hike.
Between now and the September meeting, the report said, the market has relatively little new information to work with. At the same time, oil has failed to rise above $100 a barrel, reducing the risk that energy prices will drive an upside inflation surprise. On that basis, market expectations have been moving toward no rate change in September rather than another hike, a backdrop BIT said is favorable for rate-sensitive assets such as gold.
Central banks bought 288.9 tonnes in Q2
One of the more notable changes behind the breakout came from official-sector demand. Global central banks recorded net gold purchases of 288.9 tonnes in the second quarter of 2026, the highest second-quarter total on record, up 62% from 177.9 tonnes in the same period a year earlier.
BIT noted that central banks kept adding to holdings even after gold had at one point fallen about 30% from its late-January high. That stood in contrast to net outflows from gold ETFs over the same period.
Poland's central bank was the largest buyer in the quarter with 51 tonnes. The People's Bank of China added 33 tonnes, its biggest quarterly increase since the fourth quarter of 2023, bringing first-half additions to 40 tonnes. The central banks of Uzbekistan and Kazakhstan bought 16 tonnes and 15 tonnes, respectively. BIT said that pattern suggests the buying wave is broad-based rather than driven by a single institution.
The report added that reserve allocation by central banks is usually long term in nature and often spread out over time to reduce market impact. In that reading, the record Q2 total is more likely tied to demand extending across several quarters rather than a one-off burst of buying. BIT also pointed to a recent announcement from the Bank of Korea, which said it plans to buy gold from domestic producers for the first time in 13 years as it broadens procurement channels and diversifies roughly $400 billion in foreign-exchange reserves.
Asian demand stays firm
Outside central banks, BIT said Asia is playing a larger role in price formation. In the second quarter of 2026, China and India remained the world's two largest gold jewelry markets, with combined demand of 125 tonnes, or about 45% of global jewelry demand.
Their combined demand for bars and coins accounted for about 51% of the global total, including more than 107 tonnes in mainland China and about 50 tonnes in India. In the first half, mainland China's bar and coin demand reached 314 tonnes, which the report described as the strongest first-half showing on record.
The note also said several Chinese banks are adjusting or suspending precious-metals auction trading services for retail clients, with some deferred contracts using margin trading structures. As those bank channels contract, retail investors may rely less on deferred settlement and margin-based trading and shift more of their allocation toward physical gold, accumulated gold products and gold ETFs. BIT said that change still needs to be confirmed by later fund-flow data.
Past 10 similar breakouts all posted gains
On the technical side, gold futures have already made a new short-term high. BIT reviewed 10 previous cases with similar setups and said the median three-month return that followed was 10%, with all 10 samples delivering positive returns.
Charts in the report showed that holding above $4,092 helps preserve the bullish structure, while a move through $4,208 would point to a wider upside opening up.
BIT said the current breakout is being accompanied by changes across several fronts rather than a single driver. The market is partly unwinding the hawkish expectations that had been priced in after the latest FOMC meeting, while record central bank buying and resilient physical and investment demand in Asia continue to support gold.
If inflation does not move higher again, the report said the bar for a September Fed hike remains high. BIT added that long-term central bank allocation demand and Asian gold demand still appear resilient. Based on historical data, once a basing phase ends and a similar breakout appears, the median return for gold over the next three months is about 10%, and all 10 past cases were positive. The next key test, the report said, is whether gold can stay above $4,000 and keep extending gains after breaking through $4,200.
Source and disclaimer
Some of the views above came from BIT on Target, and the full report is available through direct contact with the publisher.
Disclaimer: Markets carry risk, and this article does not constitute investment advice. Digital asset trading can involve significant risk and volatility. Investment decisions should be made only after considering personal circumstances and consulting a financial professional. BIT said it is not responsible for investment decisions made on the basis of the information provided.