This morning, COMEX gold showed significant short-term strength, rising approximately 1.3% at the time of writing. On the first trading day after the holiday, market sentiment showed some recovery, but whether gold can establish a clear trend will depend on the evolution of multiple factors.
Overall, gold may be in a phase of gradually confirming a medium-term bottom, with the range of $4,000 to $4,500 per ounce currently seen as a relatively stable consolidation zone. Within this range, there are indications of increased gold purchases by central banks, providing fundamental support for gold prices at the credit level. However, the ultimate direction of movement will still rely on developments in geopolitical tensions and marginal changes in oil prices.
It is important to note that rising oil prices have recently lowered market expectations for interest rate cuts, pushing up near-term real interest rate expectations and thereby reducing the appeal of gold. This does not reflect a fundamental failure of gold's safe-haven attributes but rather indicates that the market is paying closer attention to inflation trends from U.S. economic data, with no clear signs of recession yet. As a result, stagflation trading logic remains unconvincing, and capital is temporarily avoiding speculation at this stage.
Nevertheless, if high oil prices persist, their negative impact on the economy may gradually become apparent. Should inflation remain elevated while economic prospects weaken, questions may arise about whether the Federal Reserve's current policy stance carries inherent risks of miscalculation, potentially forcing a shift back toward expectations of interest rate cuts. This pathway warrants careful consideration by investors and represents a key factor that could drive gold prices back into an upward trajectory.
Strategically, a buy-on-dips approach remains advisable, while chasing rallies excessively should be avoided. A near-term risk lies in the first official remarks from Federal Reserve governor nominee Warsh. If his stance leans toward a hawkish, gradual approach to rate cuts, the gold market may continue to face downward pressure. Investors are advised to remain patient and wait for clearer signals before making significant moves.
Comments