XAU/USD Morning Brief: August 3, 2026
XAU/USD trades near $4,066 per ounce as bullion continues to construct a local price floor following its worst quarterly contraction since 2013, which saw spot prices drop -14%. Technical price action reflects near-term stabilization, with buyers defending immediate intraday support at $4,050 while recovery attempts remain capped beneath overhead resistance at $4,100.
Fundamental drivers point to a sharp split between institutional demand and official reserve reallocation. According to the World Gold Council, global gold demand excluding over-the-counter transactions fell 14% year-on-year to 942 tonnes in the second quarter. In response to lower prices, central banks accumulated a record 289 tonnes, even as the Central Bank of Russia moved against the trend as the world's largest official seller by offloading 22 tonnes. Meanwhile, corporate treasury diversification provided additional physical absorption, as stablecoin issuer Tether posted a $1.5 billion second-quarter net profit and increased its physical gold holdings by 14 tonnes to over 146 tonnes, maintaining bullion as a strategic pillar alongside short-term US Treasury bills.
On the supply side, physical extraction is expanding at an unprecedented rate. The World Gold Council reports that global mine production reached a record 966 tonnes in the second quarter, marking the highest second-quarter mine output level on record. This steady influx of primary mine supply continues to cap upside momentum, keeping spot prices range-bound as record mine production meets selective central bank and corporate accumulation.
Market Overview: Record primary mine output offsetting official sector accumulation keeps the intraday path of least resistance tilted toward range-bound consolidation between $4,050 and $4,100. Primary resistance rests at $4,100 and $4,135, where lingering institutional supply is likely to cap initial relief rallies. On the downside, maintaining support above $4,050 remains crucial for preserving the recent price base. An intraday breach below $4,050 would trigger a liquidity sweep down to structural demand at $4,010, whereas a sustained move above $4,100 opens up room for short-covering toward $4,135.