International gold prices recently showed a brief upward trend but failed to hold a key psychological level. According to Wind data, starting from July 17, gold prices (using London spot gold as an example) began to rise, moving from around $4,000 per ounce to above $4,100 per ounce within four trading days. On July 22, it closed at $4,131.09 per ounce.
Following this, gold prices experienced a sharp pullback, dropping 1.98% in a single day on July 23, falling back to around $4,000 per ounce. As of the time of writing on July 24, gold prices are fluctuating around $4,050 per ounce.
Market divergence over the Federal Reserve's interest rate hike expectations for the second half of the year is the primary cause of gold's recent wide-range fluctuations. Liu Siyuan, chief analyst at Lingxiu Finance, noted that besides the Federal Reserve, central banks such as the Bank of England, the Bank of Japan, and the European Central Bank have all signaled a hawkish stance. The synchronized tightening of major non-US central bank policies is passively pushing the US dollar index higher, indirectly suppressing gold's performance.
Fu Yifu, a special researcher at Suzhou Bank, added that the recent repeated tug-of-war around $4,100 per ounce is mainly due to the continuous disappointment of Fed rate cut expectations and the heating up of rate hike expectations. At the same time, international geopolitical conflicts are driving up oil prices, further strengthening inflation concerns in the US, making it harder for rate hike expectations to fade. While gold has safe-haven properties, the market is currently more worried that rising inflation will force the Fed to tighten monetary policy. This expectation of rate hikes has instead become the dominant force suppressing gold prices. Additionally, profit-taking and technical corrections following the earlier rally, along with persistent outflows from gold ETFs, are contributing to gold's inability to sustain upward momentum. Amidst these mixed factors, gold prices have entered a range-bound consolidation pattern.
Against this volatile backdrop, institutional views are also shifting. For example, Morgan Stanley in February predicted gold would rise to $6,300 per ounce by the end of the year. However, its early July research report suggested that the average gold price for the second half would be $4,400 per ounce. If the Fed raises rates, it could potentially fall to $3,500 per ounce. It is expected to rise again next year, and the structural bull market remains intact.
Institutions generally expect strong support for international gold prices around $4,000 per ounce. Under a baseline scenario, if there are no major changes in the macro environment—such as the Fed completing one rate hike within the year and inflation gradually peaking—gold prices are likely to consolidate and trade in the current price range. Fu Yifu believes that the long-term bullish logic is more solid. Continued gold purchases by global central banks provide long-term structural support, and international geopolitical uncertainties enhance gold's strategic allocation value. Overall, the downside for gold prices is relatively limited, with global central bank buying and physical demand providing bottom support. Until the Fed's policy direction becomes clearer, gold prices may experience a volatile repair pattern characterized by both a ceiling and a floor.
Liu Siyuan anticipates that, assuming the Fed implements one rate hike as expected and the market remains stable, gold prices in the second half are likely to oscillate widely within a range of $3,800 to $4,200 per ounce.
Sina is a cooperative platform for major futures account opening, offering safety and speed guarantees.
Disclaimer: This news is reproduced from a Sina cooperative media outlet. Sina's publication of this article is for information transmission purposes only and does not imply endorsement of its views or verification of its description. The content is for reference only and does not constitute investment advice. Investors act on this information at their own risk.
For massive amounts of information and precise analysis, please download the Sina Finance App.
Editor: Shi Xiuzhen SF183
Comments