Gold Market Weekly: Analysis & OutlookI. Market Trends and Institutional Game Analysis
This week, the gold price exhibited a typical volatile downward pattern, starting its correction from $3,450 on Monday and hitting an intraday low of $3,340 on Friday before rebounding sharply to around $3,370 ahead of the close. This movement essentially represents a "market washing" maneuver by institutions leveraging the short-term lull in Middle East tensions, with bears repeatedly attempting to push prices down by $10–$20 per round. However, each decline encountered significant resistance, starkly contrasting with the unilateral drop in April. Order flow characteristics indicate that bearish momentum has notably attenuated, with low-level selling appearing as a deliberately constructed "bear trap"—a signal reinforcing the unbroken medium-term upward trend of gold.
II. Macro-fundamental Support for Gold's Resilience
1.Escalating U.S. Fiscal CrisisThe U.S. fiscal deficit has reached $1.4 trillion annually, and even the $80 billion revenue increment from tariff wars remains negligible in this context. More critically, the Trump administration’s proposed "Big Infrastructure Bill" is projected to add $4 trillion to the deficit, fundamentally eroding the credit of U.S. Treasuries and the U.S. dollar’s purchasing power. Historical data shows that fiscal deficit monetization consistently drives surges in gold’s safe-haven demand, meaning a decisive peak in gold prices remains unlikely until the deficit issue is resolved.
2.Hidden Geopolitical Risks in the Middle EastThe conflict between Iran and Israel has entered a critical phase, with Iran adopting a hardline stance in negotiations—demanding not only an immediate ceasefire from Israel but also accountability for war initiators and the retention of nuclear rights. Should the situation escalate abruptly over the weekend, the $110 correction seen this week could be fully reversed on the first trading day of next week.
III. Investment Strategy: Capitalize on the "Correction Entry" Window
The market currently exhibits the trait of "limited downside, unlimited upside": geopolitical risks and U.S. dollar depreciation expectations underpin gold’s floor, while unpriced macro uncertainties leave upward potential open. For investors, this correction presents an optimal opportunity to establish medium-to-long-term long positions. We recommend batch entry between $3,350–$3,380, targeting the $3,500 psychological level, with a stop-loss set below $3,320 to mitigate short-term volatility.
Risk Warning : Closely monitor developments in the Middle East over the weekend and the pace of U.S. fiscal bill implementation, as sudden events may trigger sharp fluctuations in gold prices.
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