Zeng Gang, director of the Tianfu Liyan Finance Research Institute, said in an interview with reporters, “The sharp fluctuations in gold prices this year are essentially the result of various driving forces taking turns dominating.” “Entering the second half of the year, the situation was reversed. The rise in international oil prices has boosted inflation expectations, the inflationary pressure in the US has risen again, and the market is beginning to bet that the Federal Reserve may raise interest rates further. The strengthening of real interest rates and the US dollar directly raised the opportunity cost of holding gold as an unyielding asset.” Regarding the sharp drop on October 30, Zeng Gang also further expressed his opinion: “On October 30, high-position, crowded long liquidation and stop-loss orders were triggered centrally, and the decline was amplified, causing a stampede.” Zeng Gang believes that in the short term, the price of gold is still dominated by monetary policy expectations and the trend of the US dollar. Until the inflation data cools down significantly and expectations of the Fed's interest rate hike subside, the rebound in gold prices may be limited, and the price is likely to fluctuate widely at a low level. However, it has been falling for two consecutive months, and the short-term decline is too large, and a rebound after technical overselling may occur at any time. Investors should not blindly hunt down the bottom, let alone hunt them down. It is safer to operate in batches and small positions. In the long run, some of the basic logics that underpin gold have not disappeared at all. Global geopolitical uncertainty, high sovereign debt, diversification of central bank reserves, and the trend of “de-dollarization” will still provide medium- to long-term support.
Zhitongcaijing · 2d ago
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Zeng Gang, director of the Tianfu Liyan Finance Research Institute, said in an interview with reporters, “The sharp fluctuations in gold prices this year are essentially the result of various driving forces taking turns dominating.” “Entering the second half of the year, the situation was reversed. The rise in international oil prices has boosted inflation expectations, the inflationary pressure in the US has risen again, and the market is beginning to bet that the Federal Reserve may raise interest rates further. The strengthening of real interest rates and the US dollar directly raised the opportunity cost of holding gold as an unyielding asset.” Regarding the sharp drop on October 30, Zeng Gang also further expressed his opinion: “On October 30, high-position, crowded long liquidation and stop-loss orders were triggered centrally, and the decline was amplified, causing a stampede.” Zeng Gang believes that in the short term, the price of gold is still dominated by monetary policy expectations and the trend of the US dollar. Until the inflation data cools down significantly and expectations of the Fed's interest rate hike subside, the rebound in gold prices may be limited, and the price is likely to fluctuate widely at a low level. However, it has been falling for two consecutive months, and the short-term decline is too large, and a rebound after technical overselling may occur at any time. Investors should not blindly hunt down the bottom, let alone hunt them down. It is safer to operate in batches and small positions. In the long run, some of the basic logics that underpin gold have not disappeared at all. Global geopolitical uncertainty, high sovereign debt, diversification of central bank reserves, and the trend of “de-dollarization” will still provide medium- to long-term support.
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