Gold’s $4,600 Tug-of-War: A Hawkish Fed Farewell Meets China’s Record Buying Spree

Jerome Powell steps to the podium for what is likely his final press conference as Federal Reserve chair on Wednesday, and the gold market is holding its breath. Spot bullion hovered near $4,569 an ounce, nursing a second consecutive daily loss that has dragged prices to their lowest since late March. The session’s outcome hinges not on the rate decision itself—markets price a 99.5% probability of holding the federal funds rate at 3.50% to 3.75%—but on the tone of Powell’s parting remarks before Kevin Warsh takes the helm on May 15.

The sell-off that pushed gold below $4,600 on Tuesday appears counterintuitive at first glance. The Strait of Hormuz remains effectively blocked, Brent crude trades above $100 a barrel, and geopolitical risk is palpable. Yet this time, the traditional safe-haven calculus has inverted. Surging energy costs fan inflation expectations, which in turn pressure the Fed to keep monetary policy restrictive for longer. A higher-for-longer rate environment dims the appeal of non-yielding gold, strengthens the dollar, and pushes Treasury yields back toward 4.4%.

Ole Hansen, commodity strategist at Saxo Bank, noted that gold’s breach of technical support at $4,650 triggered automated selling programs. The most significant near-term catalyst for a rebound, he argued, would be a reopening of the Strait of Hormuz—a prospect that remains distant after Washington rejected Tehran’s latest peace proposal, delivered through Pakistani intermediaries.

The Powell-Warsh Handover Complicates the Outlook

Powell’s transition to Warsh injects an unusual layer of uncertainty into today’s FOMC meeting. Investors must parse the chair’s language not only as a monetary policy signal but as a potential final policy steer before a leadership change. Hawkish cues—suggesting fewer or no rate cuts ahead—could push gold toward the $4,600 area, while a more patient, inflation-tolerant stance might spark a recovery toward $4,865. The Senate Banking Committee is also scheduled to vote on Warsh’s nomination today, adding another variable to the mix.

Should investors sell immediately? Or is it worth buying Goldpreis LBMA?

Technically, gold is trading in a consolidation zone. The 200-day exponential moving average sits near $4,200 and has served as the bull-bear boundary since October 2025. Key support lies at $4,441, with resistance at $4,761. The relative strength index hovers just above 50, suggesting room for further downside before a bounce becomes likely. The next relevant support is around $4,510, with resistance near $4,820.

China’s Structural Bid Offsets Western Selling

While Western investors have been shedding positions, Asian buyers are stepping in with remarkable force. Chinese gold ETFs recorded record inflows of approximately $8.5 billion in the first quarter of 2026, with $1.7 billion arriving in March alone. Total holdings in Chinese ETFs swelled to 298 tonnes. The People’s Bank of China added five tonnes to its reserves in March—its largest monthly purchase in over a year—bringing official holdings to 2,313 tonnes and marking the 17th consecutive month of buying.

This creates a bifurcated market. Asian physical demand provides a structural floor beneath prices, but Western monetary policy remains the dominant near-term driver. The divergence between physical buying in Asia and paper markets in New York and London has rarely been so pronounced.

Goldpreis LBMA at a turning point? This analysis reveals what investors need to know now.

Long-Term Bullish Targets Remain Intact

Despite the current weakness, gold is up roughly 39% year-on-year. Major banks maintain their bullish annual forecasts: JPMorgan sees gold at $6,300, Wells Fargo at $6,100 to $6,300, and Bank of America at $6,000. A Reuters poll of analysts yields an average target of $4,916 for 2026, underpinned by robust central bank purchases and persistent economic uncertainty.

Any credible diplomatic development—Trump is said to have signaled to his advisors a desire to end the Iran conflict, even without a full reopening of the Strait—could quickly drive prices toward the resistance zone at $4,760 to $4,775. For now, all eyes are on Powell’s final act.

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