On April 29, the international spot gold price experienced short-term pressure and declined. McGraw Hill indicated that spot gold fell below the key support level of $4,650 per ounce, registering a single-day drop of 1.6% and touching a low of $4,605.18 per ounce, marking the lowest level in nearly three weeks since early April. The June gold futures contract in the United States similarly declined by 1.6% to $4,619.10 per ounce, as market sentiment was influenced by a mix of factors including risk aversion and interest rate expectations.
In terms of driving factors, this round of gold price adjustment is primarily attributed to rising inflation concerns driven by high oil prices. McGraw Hill believes that the sustained upward trend in oil prices has made markets more cautious about central banks' tightening stances. Concurrently, the US dollar index and US Treasury yields have risen, applying dual pressure on non-yielding gold assets. Additionally, investors opting to take some profits ahead of important interest rate meetings have intensified short-term technical selling pressure, exacerbating the price decline. However, the long-term rationale for gold has not fundamentally changed.
From a market structure perspective, global safe-haven demand has not dissipated. Geopolitical tensions in the Middle East remain high, energy prices are elevated, and global inflation expectations are generally rising, providing solid support for gold's long-term allocation value. Institutional funds maintain a net long exposure, central bank gold purchases remain steady, and the liquidity backdrop for the gold market is stable. Should risk events materialize, gold prices are expected to rebound quickly.
Looking ahead, gold prices still possess upside potential in the medium to long term. McGraw Hill anticipates that once the policy paths of major central banks become clearer, market sentiment is expected to gradually stabilize, potentially allowing gold prices to re-enter a structural upward trend. Investors are advised to monitor the policy wording and dot plot changes following the upcoming central bank decisions, consider building positions in phases, set reasonable stop-losses, and seize the strategic allocation window.