According to analysis from State Street Investment Management, the gold bull trade has shown weakness, with the spot price repeatedly testing support around $4,000 per ounce. This is attributed to the opportunity cost of holding gold and increased volatility affecting investor sentiment.
The firm believes that while price action may be more turbulent compared to 2024-2025, the gold bull market cycle still has room to run. A hawkish policy pivot from the Federal Reserve is not expected to alter the structural post-pandemic trend for gold.
State Street points out that since the US-Iran conflict, China's retail gold imports have surged, and local premiums have risen correspondingly, reflecting tightening supply and demand fundamentals in the domestic market.
State Street anticipates that gold prices could rise to a range of $4,750 to $5,500 per ounce over the next six to nine months. The price area between $3,750 and $4,000 is seen as a zone of strong support.
However, compared to the macroeconomic environment of January-February, the likelihood of gold reaching a higher range of $5,500 to $6,250 per ounce is considered lower.
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