Gold consolidates at $4,560 as central bank buying props up floor after 14% correction

Spot gold held steady around $4,560 per ounce on Monday, consolidating after a sharp 14% retreat from the January record peak of $5,595 as robust central bank buying continues to underpin the market.

The World Gold Council reported that central banks added 244 tonnes of gold to their reserves in the first quarter of 2026, sustaining the aggressive accumulation pace that has characterized the market for the past three years. The WGC now forecasts total central bank purchases of approximately 850 tonnes for the full year, which would mark another year of historically elevated official-sector demand.

"Central bank buying remains the structural story that separates this gold cycle from previous ones," said a commodities strategist tracking the sector. "At 244 tonnes in Q1 alone, the official sector is effectively absorbing a meaningful share of annual mine production, creating a price floor that institutional and retail investors are pricing in."

The metal's decline from the January all-time high of $5,595 has been driven primarily by shifting interest rate expectations and a strengthening US dollar, but the pullback has attracted fresh buying from price-sensitive physical markets in Asia. India's recent decision to hike its gold import duty from 6% to 15% has tempered demand from the world's second-largest consumer, though market participants note that the move came after a period of exceptionally strong imports.

A Reuters poll of analysts and traders published this month shows a median 2026 gold price forecast of $4,916 per ounce, suggesting the current level around $4,560 is viewed as undervalued relative to full-year expectations. The poll's range reflects wide uncertainty around the trajectory of US monetary policy and geopolitical developments, particularly the ongoing US-Iran negotiations.

The consolidation pattern around $4,500 to $4,600 has held for several weeks, with technical analysts pointing to strong support near the $4,400 level and resistance around $4,800. A sustained break above $4,700 would likely signal the end of the corrective phase that began in late January.

"We view this correction as healthy within a longer-term uptrend," the strategist added. "The macro backdrop — persistent geopolitical uncertainty, de-dollarization trends among emerging-market central banks, and elevated fiscal deficits across developed economies — remains supportive for gold. The question is timing, not direction."

Market attention this week is divided between the Fed's evolving policy stance under new Chair Kevin Warsh and the next round of US-Iran diplomatic contacts, both of which are expected to drive near-term price action.