On May 15th, as Middle East tensions continue to stir commodity markets, gold's performance as a traditional safe-haven asset has prompted renewed market scrutiny. ZFX Shanhai Securities notes that despite short-term price corrections, demand from the physical market remains robust. Allocations from institutional investors and certain sovereign funds have not shown significant weakening, with the recent price dip being viewed more as a partial realization of safe-haven premiums rather than a trend reversal.
ZFX Shanhai Securities analysis indicates that HSBC precious metals analyst James Steel recently pointed out that the local gold price on the Shanghai Gold Exchange maintains a premium of approximately twenty dollars relative to the international benchmark. This reflects strong physical buying in key Asian consumption regions, with institutional allocation demand playing a leading role. Concurrently, while European and U.S. ETF flows have seen periodic redemptions, the overall scale remains at historically elevated levels. Overall, the multi-faceted support structure for gold prices has not undergone fundamental changes.
From a geopolitical perspective, although tensions in the Strait of Hormuz have eased somewhat, the ceasefire foundation remains fragile. Market concerns about the resurgence of unexpected events have not been entirely dispelled. The industry assesses that under these circumstances, gold remains an important hedging tool within institutional portfolios. Furthermore, the pace of global central bank gold purchases continues, serving as one of the key variables contributing to the upward shift in gold's price center over the past two years.
Looking ahead, ZFX Shanhai Securities anticipates that gold prices will experience continued volatility in the short term, influenced by U.S. Treasury yields and the direction of the U.S. dollar. However, the medium- to long-term support structure is considered solid. Investors are advised to align their strategies with their own risk tolerance, focusing on the tug-of-war within the range of $4,500 to $4,800 per ounce. Close attention should be paid to monthly central bank gold purchase data and the marginal impacts arising from evolving geopolitical risks, reminding investors to allocate precious metal assets rationally.
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