XAU Faces the 50 Daily SMA After Jump, As PBOC Resumes Gold Purchase
XAU/USD was stuck in a tight range between 2 MAs on the daily chart but jumped $40 as PBOC resumed Gold purchases, however, buyers still have to push above the 50 SMA.
Precious metals are experiencing a strong performance today, driven by renewed buying activity from China’s central bank. The People’s Bank of China (PBoC) has resumed purchasing gold after a six-month hiatus, boosting sentiment across the market.
Gold Chart Daily – The 50 SMA Still Stands
Gold surged $40 to reach $2,676, briefly piercing the 50-day Simple Moving Average (SMA) before retreating below it in the final hour of trading. This marks a significant rebound, as gold had previously faced a $100 drop after China’s decision to halt purchases in May when prices exceeded $2,400/oz. With the central bank now buying gold above $2,600/oz, demand appears to have returned with vigor.
Seasonal trends typically support increased demand between December and January, but the renewed purchasing by the PBoC adds a compelling catalyst. Technically, a rise above December’s highs hints at the potential for retesting earlier peaks. However, buyers must decisively break above the 50-day SMA for sustained momentum.
Silver Outshines Gold
Silver has outperformed gold in percentage terms, rallying 4% and climbing $1.50 to trade above $32. This marks its highest levels since early November, driven by strong buying interest as the metal approached $30 on two occasions. The rebound underscores solid support in the $30 range, with bulls now eyeing further gains.
Gold Market Outlook: Key Events Ahead
The dovish stance of central banks has provided a favorable backdrop for precious metals, but upcoming economic data could influence market dynamics. Wednesday’s U.S. Consumer Price Index (CPI) report may be pivotal, with any surprises likely to affect sentiment.
For now, the resumption of gold purchases by China’s central bank is boosting optimism in the precious metals market, with both gold and silver showing signs of strength. Buyers will closely watch technical levels and upcoming data for cues on the next moves.
Gold Live Chart
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