On May 20, COMEX gold initially fell but later rose sharply during the session, closing at $4546.2 per ounce, up 0.78%. Domestically, the SHFE gold night session opened higher and maintained its gains, closing at 995.92 yuan per gram, an increase of 0.88%.
Geopolitically, former U.S. President Donald Trump stated on Wednesday that negotiations between the United States and Iran have entered a "final stage," reiterating that a war would be "very quick." Concurrently, media reports indicated that some oil tankers have resumed passage through the Strait of Hormuz. According to reports, the Iranian Islamic Revolutionary Guard Corps Navy stated that within the past 24 hours, 26 vessels, including oil tankers, container ships, and other merchant ships, passed through the Strait of Hormuz with Iran's coordination. Influenced by these developments, the U.S. dollar and Treasury yields experienced a slight retreat, providing support for gold. However, given the relative volatility of geopolitical news, caution is warranted regarding the potential impact of further developments on gold prices.
The minutes from the Federal Reserve's April meeting released yesterday showed that participants generally judged that, given persistently high inflation data and uncertainties surrounding the duration of the Middle East conflict and its economic impact, the period of maintaining the current policy stance may need to be longer than previously expected. If the U.S.-Iran conflict keeps inflation elevated, a rate hike might indeed become necessary. However, as some of these rate hike expectations had already been priced in, the impact on gold was limited. Looking ahead, the assessment of the U.S.-Iran conflict remains the dominant factor for gold. Until the uncertainties are effectively resolved, investors are advised to temper their expectations for gold prices in the first half of the year.
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