XAU context

Fundamental analysis

Government bond yields are likely to remain at elevated levels until there is clarity regarding the interest rate trajectory. Central banks continue to respond to supply shocks driven by geopolitical tensions, while the strengthening positive correlation between equities and bonds is reducing the effectiveness of bonds as a hedging instrument.

The geopolitical risk premium that has supported gold prices in recent years is likely to persist and may even increase as the current situation develops.

Against this backdrop, interest in gold ETFs and OTC instruments is likely to remain positive, although it will be below 2025 levels. At the same time, demand for physical gold — bullion and coins — may increase in 2026. This will be supported by high prices, limited investment alternatives in certain markets, inflation expectations, and a general rise in uncertainty, attracting both conservative investors and speculative capital.

The key driver of investment demand is likely to remain Asia: this is where geopolitical risks are most actively translated into demand for safe-haven assets.

The jewelry segment, in the absence of major economic shocks, may remain relatively stable; however, pressure from high prices and taxation policies in certain regions will continue to restrain demand.

Central banks are expected to maintain purchasing volumes at a high level, close to 2025 figures. Despite price volatility, regulatory demand remains stable, and ongoing geo-economic risks may serve as an additional growth factor. At the same time, in the context of new supply shocks, episodic reserve sales cannot be ruled out.

Gold mining is likely to show moderate growth in 2026, although it may be affected by energy constraints in certain regions. Recycling is also increasing, but its potential is limited by low inventories in the spot market, expectations of sustained high prices, and the geopolitical premium already priced in.

Chart analysis|

1W



For 5 weeks, price has been moving in a sideways range within a tested weekly imbalance. The last trading week formed an order block, however price has still not closed below the tested imbalance. This situation is rather neutral. In this case, it is worth paying attention to the 1D timeframe chart.

1D



Essentially, the price is moving within a range. In this case, I focus on the order flow that is forming inside that range.

The last thing we can observe is a bearish order flow — a local downward order flow whose objective was to take liquidity. The price did take liquidity and formed HR-LR liquidity. It also swept local liquidity within the intraday consolidation, which we will look at later on the 4-hour chart.

A bullish order block was formed, along with an inverted bearish imbalance. Additionally, today’s move is likely to form a bullish imbalance. I marked it in purple on the chart, but of course, whether it is actually confirmed depends on the daily close.

Essentially, this creates four confirmations of a shift in this local order flow.

If you want to understand how to use confirmations to increase the probability of identifying true order flow, you can read this study:

4H



Also, we will look at the order flow on the 4-hour chart. In this case, it is more clearly defined.

Accordingly, we get a few more confirmations here.

First — reaching a higher timeframe area of interest, which in this case is liquidity.
Second — a local liquidity sweep.
Third — acceptance above the HRLR liquidity with the formation of an imbalance.
Fourth, fifth — the inversion of the bearish imbalance.
And sixth — the formation of an imbalance that also acts as a BPR.

In this case, we are seeing alignment between the long-term and mid-term perspectives.
On the short-term timeframe, I will be looking for continuation setups in the direction of the bullish impulse. Essentially, this reflects a confluence of all three timeframes working in the same direction.

Enjoy!