Published on: 2025-11-28
WASHINGTON D.C., 26 November 2025 – Gold is entering a pivotal week as central banks continue to reshape the market: global official-sector purchases reached 64 tonnes in September alone, while gold has been holding near US$4,050/oz, reflecting its transition into a new price regime rather than a short-term spike. Against this backdrop, EBC Financial Group ("EBC") provides fresh insights into how central-bank behaviour and geopolitical tension are influencing gold — and why the outlook may be shifting accordingly.
"Gold is riding on the tailwinds, or rather headwinds, of central-bank policy and global risk. When official reserve flows meet changing interest-rate expectations and geopolitical shocks, the moves can surprise. Traders should treat the upcoming window as more than routine," said David Barrett, CEO of EBC Financial Group (UK) Ltd.
When central banks accumulate gold, they inject structural support into bullion markets. That means gold baseline trend is not purely speculative. It has official‑sector backing. Add to this the geopolitical risk dimension (such as trade tensions, currency reserve diversification away from the dollar, supply chain uncertainties) and you get a powerful tailwind. In such an environment, even a modest catalyst, an unexpected Fed comment, a weaker dollar, or an escalation in a geopolitical hot spot, can trigger disproportionate price movement as markets respond quickly to shifting risk signals.
The combination of central bank accumulation (longer‑term bullish), interest‑rate uncertainty (medium‑term driver) and options expiry (short‑term trigger) creates a "sweet spot" for elevated volatility. Divergent central bank signals matter as well: if the Fed holds rates or signals no cuts, the dollar may strengthen, putting pressure on gold; in contrast, if central banks like China or others accelerate gold buying, that reduces supply and enhances gold's appeal.
Global central bank behaviour is actively shaping the gold narrative, and nowhere is this clearer than in Europe, where the European Central Bank (ECB) is signalling a pause. A recent Reuters poll shows most economists expect the ECB to hold policy rates through 2026, citing steady inflation and resilient Eurozone growth.
Meanwhile, the People's Bank of China (PBoC) continues to quietly accumulate gold, with analysts suggesting true volumes may exceed official holdings. Central banks globally have been buying aggressively. According to the World Gold Council, central banks purchased 1,044.6 tonnes in 2024, extending a multi-year buying streak. Over the last three years, official purchases absorbed roughly 20% of new gold supply, pushing gold to represent about 20% of total official reserves, second only to the U.S. dollar.
At the same time, the Federal Reserve remains a focal point. While markets had previously priced in aggressive rate cuts, stronger-than-expected U.S. inflation and employment data have dampened expectations, with the probability of a December cut now around 40‑50%. The combination of strong reserve accumulation, geopolitical risk, and divergent monetary policy creates a layered and complex backdrop for gold.
Technical and market cues underline both the fragility and opportunity in this cycle. Spot gold has recently hovered in the US$4,040‑4,075/oz range, marking a transition into a higher price regime supported by structural drivers rather than a short-term spike. Support near US$4,020/oz is being monitored as a key reference point, while some analysts note ~US$3,800/oz as a deeper structural floor in case of negative flows.
On the macro front, investor attention is on U.S. inflation, non-farm employment data, and central-bank commentary, with shifts in any of these potentially accelerating market moves. ETF flows and futures activity may also amplify short-term price movements, translating macro and geopolitical signals into measurable market volatility.
EBC analysts highlight that central bank gold accumulation remains a structural bullish signal, and any unexpected acceleration in these purchases could influence market momentum. Dollar and interest-rate developments are also key factors: a stronger dollar could weigh on gold, while dovish moves may offer upside support.
Derivative flows and market positioning act as short-term amplifiers rather than primary drivers, magnifying reactions to macro and geopolitical factors. Analysts also observe that support and resistance levels, particularly around US$4,020, will likely serve as reference points, as changes in central bank behaviour, geopolitical tensions, or Fed guidance could prompt rapid price responses. Overall, EBC sees gold's near-term outlook as shaped by official reserve policy, interest-rate expectations, geopolitical uncertainty, and derivative mechanics, establishing both structural support and elevated short-term volatility.
For more analysis from EBC, visit: www.ebc.com.
Disclaimer: This material is for information only and does not constitute a recommendation or advice from EBC Financial Group and all its entities ("EBC"). Trading Forex and Contracts for Difference (CFDs) on margin carries a high level of risk and may not be suitable for all investors. Losses can exceed your deposits. Before trading, you should carefully consider your trading objectives, level of experience, and risk appetite, and consult an independent financial advisor if necessary. Statistics or past investment performance are not a guarantee of future performance. EBC is not liable for any damages arising from reliance on this information.
