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Gold prices were broadly unchanged last week, pausing for breath after a strong run as traders looked ahead to a packed calendar of central bank decisions. The broader trend still leans bullish, but the list of reasons why this rally might soon run out of steam is quietly growing. I’m still keeping an eye out for signs of a short-term bearish reversal — but it needs to come from the charts themselves. There’s little sense in pre-empting a turn.

Hawkish central banks in 2026

The usual bout of December dollar softness has kept gold supported, though this has been tempered by expectations of bottoming of global interest rates, which in turn have held bond yields at elevated levels. Any fresh rise in yields would make non-yielding assets like gold far less appealing. But for now, the gold price remains in an uptrend.

Attention now shifts to central bank meetings kicking off this week. US data threw up a few mixed signals — some pockets of strength but nothing that should stop the Federal Reserve delivering a rate cut. Even so, the cut itself is unlikely to lift gold materially from here; the move is almost entirely priced in. What the market really wants is a softer tone for 2026, and that’s where the disappointment risk sits.

A key theme emerging into year-end is the sense that several major central banks may have already reached, or be very close to reaching, the trough in their policy cycles. It’s not just the Bank of Japan charting its own path. Markets now fully price a 25bps hike next year in Australia, New Zealand and Canada, and even the Eurozone could join that list given recent hawkish rhetoric and improving data. If that shift in expectations gains traction, it becomes much harder for gold to sustain its lofty perch.

Where might things go wrong for gold?

Recent gold strength has leaned heavily on familiar supports: geopolitical jitters linked to Russia and Ukraine, the ongoing conversation about de-dollarisation, and steady central-bank demand — particularly from China. But once you strip away those big-ticket themes, the rally does look a little light on fresh catalysts. It begs the question: how much momentum is really left?

China sits at the heart of that question. If the PBOC starts to ease off its gold accumulation at current prices, leveraged longs could very quickly rethink their optimism. And those sorts of reversals are rarely orderly.

There are also tentative signs of geopolitical cooling: slow-moving peace discussions around Ukraine, the recent ceasefire in Gaza, and a more cordial US–China tone after their recent trade stabilisation efforts. In theory, all of this should remove a slice of gold’s safe-haven premium. Yet prices have barely budged.

The weaker US dollar index has certainly helped maintain a firm base, but the calmness in price action might not hold for too long. What is missing is a fresh spark. Japan, too, warrants attention. Rising JGB yields on expectations of a BoJ hike have raised concerns that volatility in Japanese bonds could spill over into global equities. Should carry trades unwind in earnest, expensive US tech stocks and even precious metals could be swept up in the turbulence.

Gold technical analysis

From a technical perspective, gold remains in an established uptrend, though the momentum behind that trend is clearly fading. That leaves the metal vulnerable to short-lived bursts of volatility if key support levels begin to crumble.

The immediate zone to watch is $4190, an area that has defined the lows of the past few sessions. A decisive break below here exposes the short-term trend line and then $4100, a natural psychological marker and the origin of the latest swing higher. A daily close beneath $4100 would be a firmly bearish development, opening the door towards $4000.

On the upside, resistance remains layered between $4220 and $4270, an area where gold has repeatedly stalled. Bulls will need a clean and convincing break above this zone to re-energise the trend and make a credible push towards new highs.

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