Gold rebounds and corrects, beware of lofty pullbacks
During the Asian trading session on Monday, gold prices briefly pulled back towards
However, from a macro perspective, the upside for gold remains clearly capped. The ongoing escalation in the Middle East, especially disruptions to transport through the Red Sea and the Strait of Hormuz, have pushed oil prices to remain at elevated levels, further reinforcing global inflation expectations. The market generally expects that, against the backdrop of rising energy prices, major central banks are likely to maintain high interest rates for an extended period, or possibly tighten monetary policy even further. This logic significantly suppresses gold, as a high rate environment increases the opportunity cost of holding gold.
From an event-driven perspective, the Middle East conflict is entering a more complex stage. According to market surveys, the US is considering ground action against Iran, while the Houthi forces are increasing the intensity of their attacks, expanding the scope of the conflict. This situation not only pushes energy prices higher, but also impacts the global economy and increases market uncertainty. In theory, such geopolitical risks would support gold, but the current market is more focused on their effects on inflation and interest rates, which weakens gold's safe-haven attributes.
From market performance, gold is currently in a state where bullish and bearish factors are intertwined. On the one hand, dollar retracement and safe-haven demand provide a floor for gold prices; on the other hand, high interest rate expectations and inflation pressures are capping its upside. As a result, prices are showing a choppy recovery pattern, lacking a clear trend direction.
Editor’s Summary
Currently, the gold market is in a typical "bull-bear game" stage. Dollar retracement and geopolitical risks provide support for gold, but inflation pressures from higher oil prices and high interest rate expectations continue to suppress the upside. In the short term, gold is more likely to maintain a range-bound trend, waiting for new drivers to emerge. If inflation continues to rise and reinforces tightening expectations, gold could come under renewed pressure; conversely, if the dollar weakens or risk sentiment rises significantly, it may drive gold to further rebound.
Editor: Zhu Hennan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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