Last Friday (January 31), gold prices experienced significant volatility. After hitting a new all-time high near $5,600 per ounce on Thursday, prices plunged over 9% to around $4,900 on Friday. This sharp swing was triggered by a rebound in the US dollar and a retreat in precious metal prices following the nomination of Kevin Warsh as the next Federal Reserve Chair. From a technical perspective, gold's price had accelerated approximately 21% over two weeks, pushing short-term momentum indicators into extreme overbought territory. The recent pullback of 26% is comparable to the correction seen after gold peaked at $4,300 in October of the previous year.

Goldman Sachs: A Buying Opportunity Core View: The pullback is healthy, and the medium-to-long-term bullish thesis remains intact. Key Rationale: 1. Exceptionally strong demand - Central bank and investor gold purchases have far exceeded expectations. Central banks bought 757 tons in Q4, while retail investment demand reached 420 tons, both setting record highs. 2. Persistent structural support - The proportion of gold in global investor portfolios has risen to 3.2%, but significant room for growth remains, with a target of 5%. 3. Geopolitical risks - Long-term concerns regarding Federal Reserve independence, fiscal sustainability, and de-dollarization continue to develop. Price Forecast: Q4 Target: $6,300/oz Year-End 2026: $6,300/oz Year-End 2027: $6,600/oz Risk Warning: The primary downside risk is accelerated US economic growth combined with a Fed pivot to rate hikes, although Goldman Sachs believes this is unlikely to cause a crash similar to the 2013 "Taper Tantrum."

UBS: Cautiously Optimistic, But Be Careful Core View: Gold prices have not peaked, but the short-term overheating requires a cooldown. Key Rationale: 1. Fundamentals unchanged - Demand for portfolio diversification, central bank buying, and physical demand (especially from China) remain robust. 2. Weaker US dollar - The negative correlation between gold and the dollar remains intact, with a soft dollar continuing to support gold prices. 3. Record ETF inflows - Gold ETFs in the US and China continue to see net inflows. Price Forecast: - 2026 Average Price: $5,200/oz (up 11%) - Year-End Target: Support expected around $4,500 Risk Warning: - More cautious on silver, seeing risks of an excessive correction above $80/oz. - Heavy short-term speculative positioning could trigger a deeper pullback.

Morgan Stanley: Significantly Raises Target, Most Optimistic Core View: Progress is faster than expected, targeting $6,300 by year-end. Key Logic: 1. Demand exceeds expectations - A quarterly demand increase of $17 billion, initially projected to take 4 years, was achieved in just 3.5 months. 2. Accelerating central bank purchases - Forecasts central banks will buy 800 tons in 2026 (above the 2025 average of 750 tons). 3. Rising investor allocation - The gold allocation in investor portfolios has increased from 3% in 2021 to 3.2% currently, targeting 5%. Price Forecast: - Q1: $5,100 - Q2: $5,530 - Q3: $5,900 - Q4: $6,300 (significantly raised from a previous $5,000) - Year-End 2027: $6,600 Risk Warning: Quarterly demand of 380 tons is the "critical point" to sustain the rally; levels below this could trigger a correction.

Consensus Supporting Factors Among the Three Banks: 1. Sustained central bank buying - Amid de-dollarization trends, central banks (especially in emerging markets) continue to increase gold reserves. 2. Rising investment allocation - Global investor gold allocation still has room to potentially double. 3. Geopolitical uncertainty - Concerns over US policy, trade relations, and fiscal sustainability. 4. Resilient physical demand - Jewelry and investment demand in regions like China remains strong. 5. Weaker US dollar - Policies from the Trump administration may continue to pressure the dollar. Risk Factors: 1. US economic growth exceeding expectations + a hawkish Fed pivot - This is the most significant downside risk. 2. Short-term technical overbought conditions - Momentum indicators suggest a need for consolidation. 3. Stock market crash triggering a liquidity crisis - Could force investors to sell gold for cash. 4. Emerging market central banks shifting to monetization - Might sell gold to cover budget shortfalls.

What Should Investors Do? Short-term (1-3 months): - Focus on buying on dips; the $4,500-$4,900 range may present good entry points. - Be cautious of excessive speculation in silver; the gold-to-silver ratio may rebound to 70-75. Medium-to-long-term (1-2 years): - All three banks agree the long-term upward trend for gold remains unchanged. - Increasing gold allocation to 3-5% of a portfolio is a reasonable strategy. - Monitor central bank purchasing data and ETF inflows as leading indicators.

Morgan Stanley's technical analysis indicates similarities between the current gold price movement and the bull market of the late 1970s: - Both experienced sharp corrections after rapid ascents (a 30% correction in January 1980 vs. 26% currently). - Both were driven by structural factors (stagflation then, de-dollarization and fiscal concerns now). - Both showed strong performance relative to paper assets (the S&P 500/Gold ratio is near its 2013-2025 support level). A key difference, however, lies in the Fed's policy space. Whereas Volcker aggressively hiked rates to combat inflation in the 1980s, the current Fed faces fiscal pressures, making a repeat unlikely.

While the three banks have nuanced short-term strategies, they are highly aligned on one point: the long-term bull case for gold remains intact. Last week's pullback appears more like a technical breather after a rapid rise rather than a trend reversal. For the average investor, rather than fixating on catching the absolute bottom, it may be more prudent to focus on gold's strategic value within an asset allocation. In an environment characterized by high debt, rising geopolitical risks, and a reshaping of the monetary system, gold is reaffirming its status as the "ultimate currency." Core Conclusion: The pullback represents an opportunity, but investors should build positions gradually and hold for the long term.