YLG indicates gold is consolidating before continuing its upward trend, with the next target seen at $5,400.

Can gold's strong surge continue? YLG explains the technical reasons, indicating gold is consolidating before continuing its pursuit of $5,400. The report highlights supporting factors such as ETFs and buying pressure during the Chinese New Year period, which has pushed prices to new highs.

26 Jan 2569 Mrs. Phawan Nawawattanasub, Chief Executive Officer, YLG Bullion International Co., Ltd. (YLG) It was stated that, considering technical factors, gold is still trading above all moving averages—short, medium, and long term—reflecting continued buying pressure. As long as the price of gold remains above the support level around $4,640 per ounce, it can continue to attract buying interest.

There is a possibility that global gold prices will surge to test $5,100-$5,136 per ounce, aiming towards $5,400 per ounce before a major correction. Negative warning signals are emerging suggesting a potential consolidation phase (or temporary pullback) to rebuild momentum, as prices have currently risen to an overbought condition in the 4-hour, daily, and weekly charts.

Furthermore, divergence is beginning to appear between price and the Relative Strength Index (RSI) on the weekly chart. If the price breaks below $4,640 per ounce, a correction is anticipated, but this is still seen as a consolidation phase before a further upward trend, as long as the price remains above the support level of $4,274 per ounce.

However, even though rising gold prices may trigger intermittent profit-taking sales, YLG assesses this as short-term profit-taking from speculators, ETFs, and some countries holding gold. We believe that most central banks will continue to hold gold in the long term, without selling to diversify their international reserve portfolios. Therefore, central banks are more likely to remain net buyers of gold rather than switching to net selling.

Looking at the gold buying pressure from the end of December to January, it appears to have come from all sectors and investor groups, including:

1. A group of speculators in the COMEX market from hedge funds and fund managers. In the week ending January 20th, the number of long positions increased by 4,843 contracts to 163,668 contracts, while the number of short positions held by speculators increased by 2,144 contracts to 26,224 contracts. This resulted in a net long position among gold speculators of 137,444 contracts, or 427.53 tons, indicating that retail investor demand is currently playing a significant role in driving gold prices in the market.

2. Institutional investors, ETF funds, capital flows into and out of ETFs. Gold provides investors with insight into the perspective of large investors who use gold ETFs as a tool for portfolio management. By 2568, global gold ETFs are projected to hold a total of 800.3 tons of gold, reaching 4,024.5 tons – a new all-time high. Prior to the first half of January, global gold ETFs added another 35.8 tons, bringing their total holdings to 4,064.7 tons.

3. Demand from China. In December, a total of 115 tons of gold was withdrawn from the Shanghai Gold Exchange (SGE), a 36% increase compared to the previous month. This reflects recovering wholesale demand for gold in China as retailers stockpile gold for seasonal year-end and year-end sales ahead of the Chinese New Year. Meanwhile, Chinese gold ETFs saw their fourth consecutive month of inflows in December, adding 3.9 billion yuan (approximately US$545 million or 3.8 tons). The People's Bank of China (PBOC) also reported its 14th consecutive month of gold purchases in December, adding another 0.9 tons. By the end of 2025, China is projected to hold 2,306 tons of official gold reserves, representing 8.5% of its total foreign exchange reserves.

4. Demand from India. Although soaring gold prices have pressured buying interest in physical gold, India's purchases of digital gold through the Unified Payments Interface (UPI) system have steadily increased throughout 2025. Transaction value jumped from 8 billion rupees (approximately US$88 million) in January to 21 billion rupees (approximately US$231 million) in December, nearly tripling in one year. This growth is driven by ease of purchase, increased participation from new buyers and a wider investor base, and the rise of market providers from both gold jewelers and fintech platforms.

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