Gold support holds on central bank buying

Gold started Monday near $4,065 per troy ounce, recouping some of last week's losses. But don't be fooled—the recovery lacks conviction, revealing that this is a period of consolidation rather than the beginning of a sustained rally. In short, the precious metal is catching its breath, not preparing to charge higher. 

What's driving such a dynamic? The resumption of US-Iran talks has taken some of the sting out of inflation fears, pushing the safe-haven trade—and with it, the urgency to hedge against rising prices—to the back burner.

On a more positive note, last week's Federal Reserve (Fed) meeting offered a helping hand: interest rates were left untouched, which kept the dollar in check and preserved gold's appeal. Now, all eyes turn to US jobs data, especially the ADP Nonfarm Employment Change report, which could reshape expectations for the regulator's next move. 

The latest World Gold Council figures also added a dose of optimism: second-quarter (Q2) demand held steady year‑on‑year, while central bank purchases surged nearly fivefold from Q1. This kind of institutional buying is a powerful anchor for quotes. So, even if retail investors are hesitating, the official sector is quietly providing a floor beneath the market. 

From a technical standpoint, gold is hovering near $4,065, stuck in a tight $4,037–$4,195 range. The Stochastic Indicator has just climbed above the 50 midline, showing a recovery in short‑term momentum from oversold levels around 20. However, the Chaikin Oscillator remains below zero, flashing a warning sign: selling pressure hasn't let up, and the divergence with price dynamics casts doubt on the durability of this bounce. This mixed technical picture suggests that caution is still warranted. 

For those looking to act, pay attention to the trading plan down below:

Buy gold at the current price. Place Take profit at $4,190. Set Stop loss at $3,990.

This forecast holds true from August 3 till August 10, 2026.