Everbright Futures 0515 Gold Commentary: Bullish and Bearish Factors Intertwined, Gold Prices Expected to Maintain Short-term Volatility

Recently, international gold prices have shown overall weakness, with the market displaying a volatile pattern where upward resistance and downward support coexist due to multiple competing factors.

On the macro front, the US Senate has approved Walsh as the chair of the Federal Reserve, and the market is highly focused on his first official statements. He maintains the position that "inflation is a monetary phenomenon" and takes a cautious stance toward rate cuts. With US April CPI year-on-year growth exceeding expectations and inflation remaining sticky, Walsh will undoubtedly face significant challenges regarding inflation and rate cuts after taking office. Market expectations for a Federal Reserve rate cut are further delayed, and theoretically, the high-interest rate environment increases the opportunity cost of holding gold, which restricts further rises in gold prices.

In terms of geopolitics, negotiations between the US and Iran remain severely deadlocked. Iran has set clear preconditions, including ending hostilities, lifting sanctions, and recognizing Iran's sovereignty over the Strait of Hormuz; otherwise, the US and Iran will not enter a new phase of negotiations. Transit issues in the Strait of Hormuz remain a key area of market focus, as it is one of the world's most important energy transportation channels. Any disturbance in the situation could trigger volatility in market risk-aversion sentiment.

Overall, the fierce US-Iran negotiations, expectations of Federal Reserve monetary policy, and ongoing enthusiasm in US stocks make it difficult for gold to establish a clear trend in the short term. Gold prices are likely to maintain the characteristic of being supported below and capped above, with the market waiting for negative factors to be fully priced in. Strategically, it is advisable to continue allocating gold on dips, but in the short run, investors should remain cautious about dual disruptions from macro policies and geopolitical events, control their positions, and wait for clearer directional signals.

Source: Everbright Futures Research Institute

Author: Yao Tao

Professional Qualification: F3082336

Trading Consulting Qualification: Z0018553

Editor: Zhu Henan