On Thursday, spot gold traded within a narrow range during Asian and European hours, holding onto all gains from Wednesday. It consolidated just below the significant 5,000-point level, trading around 4,991. The international gold market has recently shown a strong rebound, with London spot gold once breaking through the key level of $5,000 per ounce. Domestically, Shanghai spot gold and branded gold jewelry prices have also risen in sync, with retail prices for brands like Chow Tai Fook and Chow Sang Sang exceeding 1,560 yuan per gram. The core logic behind this rebound is the dual resonance of geopolitical uncertainty and monetary policy expectations, combined with hedging demand driven by diverging market risk preferences, collectively enhancing gold's allocation value.
Geopolitical risks are undoubtedly the primary driver of this round of gold's rise. The ongoing deployment of US troops around Iran continues to develop, with reports suggesting the US military could launch a strike on Iran as early as Saturday. The Pentagon has planned to evacuate some personnel from the Middle East to Europe or the mainland US within the next three days in preparation for potential conflict or Iranian retaliation. Although White House Press Secretary Caroline Levitt stated that US-Iran negotiations have "made some progress," the two sides remain "far apart" on key issues, and the Trump administration has not explicitly ruled out military options. This ambiguous situation, where "negotiation progress coexists with conflict risk," has further increased the market's risk premium. Meanwhile, although procedural progress has been made in Russia-Ukraine talks, the US continues to sell weapons to NATO allies, meaning geopolitical uncertainties have not been fundamentally resolved. Under the overlay of multiple geopolitical risks, the market has begun pricing in emergency scenarios in advance, with gold, as a traditional safe-haven asset, showing typical characteristics of net safe-haven capital inflows. The simultaneous climb of oil prices to multi-week highs further strengthens gold's logic as an anti-inflation allocation.
Notably, the market is currently witnessing a special pattern where stock markets and gold prices are rising simultaneously. The multi-year AI chip cooperation agreement between Nvidia and Meta Platforms provides underlying support for US economic growth, allowing investors to maintain exposure to technology and growth sectors while increasing allocations to gold to hedge against geopolitical shocks. This continues the recent unique trend of "simultaneous allocation to both risk-on and risk-off assets," also leading to phenomena where tech stocks and precious metals sometimes rise and fall together.
Adjustments in monetary policy provide another core support for gold. The January FOMC meeting minutes clearly indicated that the probability of policymakers cutting rates in the short term is very low. Data from CME's "FedWatch Tool" shows only a 5.9% probability of a rate cut in March, with a 94.1% chance rates remain unchanged. This stance reflects confidence in the resilience of the US economy but also hints that inflation remains a core concern. More noteworthy is the interpretation by "Fed whisperer" Nick Timiraos: the January minutes removed the explicit statement from December about "inflation returning to 2% by 2028," instead emphasizing that inflation forecasts are "modestly higher and balanced," only expecting inflation to resume its declining trend after the effects of tariffs end. This ambiguity regarding the inflation target timeline intensifies market concerns about long-term inflation persistence. While gold's anti-inflation properties恰好 meet investors' hedging needs, the inflation-driven suppression of Fed rate cut expectations directly negatively impacts gold, with the negative force potentially outweighing the uplift from inflation fears. Although the high-interest-rate environment imposes short-term pressure on non-yielding assets like gold, the combination of sticky inflation and policy uncertainty makes gold a quality asset for hedging against interest rate volatility risks. Compared to interest-rate-sensitive assets like high-growth tech stocks, gold's volatility resilience is more prominent.
Influenced by the Fed minutes, heightened domestic inflation concerns in the US also led to a strong rebound in the US Dollar Index on Wednesday. However, curiously, gold did not fall inversely but instead saw the unusual phenomenon of the dollar and gold rising simultaneously. This suggests that demand for dollar-denominated gold increases even as its price rises, indicating that recent geopolitical-driven demand for gold is strong enough to overlook price increases. Optimism towards technology provides improved market risk appetite, while geopolitical caution provides buying reasons, jointly fueling this precious metals rally. While the tech sector shows a partial bull market catalyzed by positive AI industry developments, macro risks such as Middle East tensions, oil price volatility, and slower-than-expected inflation decline limit the expansion of full risk exposure. This pattern further highlights gold's hedging value.
In the short term, market sensitivity to geopolitics will remain high. If a US-Iran conflict materializes, gold prices could challenge $5,100 per ounce or even higher targets. If negotiations achieve a breakthrough, the fading geopolitical premium could trigger a pullback in gold towards the $4,900 per ounce support level. Looking at real-time quotes, as of February 19, London spot gold was quoted at $4,992.24 per ounce, still maintaining high-level volatility, indicating the market's pricing of geopolitical risks is not yet fully complete.
In summary, the recent rise in risk appetite driven by the AI rebound, coupled with unresolved geopolitics and the atmosphere of significant US military pressure, continues to propel the rebound in gold and other precious metals. The simultaneous rise in crude oil also represents the market's optimistic pricing of geopolitical factors. However, if geopolitical developments fall short of market expectations or a black swan event occurs in AI, it could easily lead to a double pressure of contracting risk appetite and easing geopolitical tensions. Investors need to manage risks carefully.
From a medium to long-term perspective, structural demand from global central bank gold buying and the "de-dollarization" process provide solid underlying support for gold. Prices below $5,000 per ounce still hold long-term allocation value. Investors could consider adding to positions in batches during pullbacks to the $4,700-$4,800 per ounce range to lock in long-term gains.
Technically, spot gold has reclaimed the 4,944 level. Although facing channel resistance, the recovery of this key point suggests the rebound has potential to continue. As of 19:33 Beijing Time, spot gold was quoted at $4,985 per ounce.