Institution: Gold prices under short-term pressure but long-term bull market remains, expected to stabilize above $5,000 within the year
Currently, the gold market is overall maintaining a wide-ranging sideways pattern, with continued weakness in price action. Influenced by market sentiment driven by a short-term increase in inflation, the risk aversion sentiment in the market has shifted, generating hawkish tightening expectations for interest rates and continuously suppressing the upside potential for gold prices
Key institutional viewpoint: The impact of energy shocks on inflation is short-term
Lorenzo Portelli, Head of Cross-Asset Strategy at Amundi Investment Institute, said in the latest precious metals research report that the ongoing tensions in Iran are causing volatility in the energy market. The resulting supply shock will only have a phased impact on global inflation levels and is unlikely to bring sustained long-term inflationary pressure.
Diverging inflation data eases pressure for central bank tightening
The chaotic situation in the Middle East has driven a surge in energy prices, directly pushing overall inflation higher, with the annual inflation rate climbing to a near two-year high of 3.3%. Excluding the more volatile energy components, core inflation data remained relatively mild, with core consumer prices rising 2.6% over the past twelve months.
Multiple fundamental factors provide a solid long-term foundation for gold
Summary
Overall, gold may see increased volatility in the short term due to interest rate expectations and geopolitical events, but its fundamentals remain solid. Portelli emphasized that gold remains a high-quality safe haven and store of value asset. While it cannot hedge every market fluctuation, it can effectively withstand systemic risks, currency depreciation, and shocks from global policy shifts, thereby retaining prominent long-term allocation value.
Editor: Zhu Henan
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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