Boshi Gold ETF Fund Manager Wang Xiang stated that last week (April 6-10), the gold market continued to be dominated by news related to the Iran conflict. With Pakistan's mediation, both the U.S. and Iran signaled a temporary ceasefire and engaged in negotiation talks, boosting market risk appetite and driving a rebound in gold prices. However, the weekend talks ended without an agreement, and the foundation for a ceasefire may remain fragile, suggesting that short-term gold price movements are still expected to be filled with uncertainty.
Regarding market perspectives, U.S. CPI rose 3.3% year-on-year in March, with a monthly increase of 0.9%. Gasoline prices surged 21.2% month-on-month, marking the largest increase since 1967, although both core inflation and CPI figures were better than or in line with expectations. Market expectations for Federal Reserve rate cuts saw little change, and speculation about further rate hikes did not intensify. Housing and service costs rose moderately, while airfare prices continued to increase significantly. Core inflation is expected to face upside risks going forward, with the key factor being the persistence of high oil prices influenced by geopolitical developments in the Middle East.
Data released by the People's Bank of China during the week showed that gold purchases in March amounted to nearly 4.5 tons. Compared to the average monthly purchase of 2 tons over the past year, the central bank's buying on dips may reflect that the long-term logic of de-dollarization has not fundamentally changed amid global turbulence. In contrast, gold sales by central banks such as Turkey and Poland were more influenced by short-term liquidity factors under the petrodollar framework.
Overall, amid the intertwined effects of geopolitical risks, inflation expectations, and market sentiment, gold is expected to maintain relative strength in the long term. However, short-term direction is likely to remain subject to disruptions from geopolitical developments.
In terms of last week's market dynamics, the first round of U.S.-Iran negotiations ended in failure, with nuclear constraints posing a significant obstacle. After U.S. President Trump announced a two-week ceasefire on April 7, high-level direct talks between the U.S. and Iran took place in Islamabad from April 10 to 11, lasting 21 hours but concluding without results. The U.S. side indicated that the core reason for the lack of an agreement was Iran's failure to make a clear commitment to long-term nuclear disarmament. Iran, on the other hand, blamed the breakdown of talks on "U.S. greed and ambition."
U.S. headline CPI returned to the "3% era" in March, with a year-on-year increase of 3.3%, compared to the previous figure of 2.4%. Month-on-month, CPI rose 0.9%, meeting expectations, while core CPI increased 2.6% year-on-year and 0.2% month-on-month, both below market expectations of 2.7% and 0.3%, respectively. In the short term, rising oil prices and tariff effects may keep inflation relatively elevated, warranting close attention to changes in inflation expectations.
(Risk warning: Recent gold price volatility has been significant. Investing in gold funds requires a full understanding of risks, and decisions should be made prudently based on individual risk tolerance. It is also advisable to continuously monitor global macroeconomic trends, central bank gold purchases, and related policy developments.)
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