Gold surge pressures USD as China extends 15-month buying spree

Gold prices have surged significantly in early 2026, with China's reserves jumping in value from $319.45 billion to $369.58 billion in just one month, despite only adding 0.04 million troy ounces. This 15.7% value increase reflects gold's strong performance and continued central bank diversification away from USD holdings. China's persistent accumulation, now totaling 74.19 million troy ounces, signals sustained institutional demand that traditionally supports higher gold prices and weakens dollar strength. The trend aligns with broader de-dollarization efforts among major economies, potentially impacting USD pairs across the board. Gold's rally typically shows inverse correlation with USD strength, suggesting downward pressure on dollar pairs like EUR/USD and GBP/USD may ease. Technical analysis shows gold breaking above key resistance levels, with momentum indicators supporting continuation. Forex traders should monitor this dynamic as sustained gold buying could accelerate USD weakness, particularly against commodity currencies like AUD and CAD.