Central Banks Return to Gold After 26% Rout

Gold’s 26% retreat from its peak underscored a sharp shift in investor positioning as capital crowded into semiconductor shares and other growth assets. The decline matters because bullion remains a key hedge against inflation, geopolitical shocks and currency risk, while its relationship with Bitcoin and other digital assets is increasingly watched for signs of rotation between traditional and emerging stores of value.

Central banks have resumed accumulating gold after a quieter first quarter, although the cited report did not identify individual institutions or disclose exact purchase dates or amounts. The renewed official-sector demand coincides with improving technical signals following the 26% selloff: the 50-day moving average and 200-day exponential moving average have registered bullish breaks. Analysts say deeply depressed sentiment and persistent macro hedging demand create an asymmetric setup, with potential upside outweighing further downside risk.