On May 18, COMEX gold halted its decline and stabilized, fluctuating at low levels, closing at $4,570.8 per ounce, up 0.20%. Domestically, SHFE gold opened higher and closed lower during the night session, ending at 998.12 yuan per gram, up 0.04%.
As the stalemate in US-Iran negotiations continues to test both sides' patience, earlier on Monday, Trump stated he would not consider making any concessions to Iran and threatened to resume military strikes. However, late in the evening, he unexpectedly "hit the brakes" again, stating that the decision to delay the attack was based on the ongoing serious negotiations. According to leaders and allies from Qatar, Saudi Arabia, and the UAE, both parties are expected to eventually reach an agreement that will explicitly prohibit Iran from possessing nuclear weapons. The volatile prospects of the negotiations caused oil prices to fall initially and then rise, putting pressure on US stocks. Gold prices ceased their decline but continued to fluctuate at low levels, remaining below the 1,000-point threshold. Media reports indicate that Trump will preside over Walsh's swearing-in ceremony on Friday, with market attention focused on Walsh's first official statement after taking office.
Currently, the precious metals market is facing three major challenges. First, while the US economy shows resilience, it faces the threat of secondary inflation, which has once again dampened expectations for interest rate cuts. Second, the new Federal Reserve Chair Walsh is about to take office, and there is market concern that, amid unexpectedly high inflation, his first official statement may remain hawkish, potentially undermining expectations for market liquidity. Third, the US-Iran ceasefire agreement is in a "precarious" state, with concerns that both sides' patience may wear thin, leading to a resumption of hostilities. Particularly, the unresolved issue of the Strait of Hormuz could have a significant impact on the energy market. In the current context of stubborn inflation and the Federal Reserve's policy framework, gold faces considerable pressure. Investors are advised to lower their expectations for gold prices in the first half of the year and closely monitor developments in the US-Iran situation in the short term.
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