Gold price fluctuates repeatedly, institutions believe the timing for investment has arrived

　　Source: Global Times

　　[Global Times Finance Comprehensive Report] On October 9, gold prices rebounded. Previously, as investors weighed between concerns about the Federal Reserve's uncertain interest rate path and the high U.S. debt, gold prices had fallen to a two-month low on Wednesday, then rebounded in the following two trading days, with COMEX gold closing up 1.52% at $4,220.3 per ounce.

　　According to Nitesh Shah, commodity strategist at WisdomTree, rising yields appear to highlight that market concerns over high debt levels are spreading. If debt continues to increase, gold may be favored. Minutes from the meeting show that Federal Reserve policymakers were divided last month over the reasons for raising rates. While "some participants" believed rate hikes were necessary to suppress the impact of shocks in energy and other prices, the more hawkish core argued that it was necessary to guard against emerging demand-driven inflation.

　　Nitesh Shah believes the minutes highlighted that there is no truly preset path here, which has led to slightly higher (gold) market volatility.

　　Federal Reserve Governor Christopher Waller stated on October 8 that further interest rate hikes may still be needed, but added that the pace of hikes could be "flexible", leaving room to pause in October. According to CME's FedWatch tool, traders see a 17% chance of a rate hike in October, but price in an 81% probability for December. Rising interest rates weaken the appeal of non-interest-bearing gold.

　　From the perspective of holdings, according to analysis by Dongwu Securities, global gold ETF holdings in September net increased by 1.50 million ounces, with ETF holdings seeing net inflows against the trend, indicating that long-term allocation funds continued to position during the pullback. Founder CIFCO Futures believes that global central banks' willingness to buy gold remains strong, and there are signs of contrarian positioning from investors. Between January and August this year, China's gold imports have already surpassed the annual import volumes of previous years. Excluding about 80 tons held by the central bank, private imports have also seen a marked increase. The institution believes that the gold and silver market in October will still face bottom-finding, with the possibility of falling below July's low, but the mid- to long-term upward logic remains unchanged, and downstream industrial demand for risk protection can wait patiently. This bottom cycle will be a good timing point for mid- to long-term allocation. (Wen Hui)

Editor: Zhu Henan