【Hotspot Tracking】Gold is targeting 4600 and a pullback is an opportunity

Risk aversion moderates gold correction

On the one hand, the world's two largest economies have recently expressed willingness to further communicate on trade, which has cooled the trade conflict.

On the other hand, the Russia-Ukraine conflict has shown signs of cooling. During Ukrainian President Volodymyr Zelenskyy's visit to the United States, President Donald Trump stated that the U.S. would not provide assistance with Ukraine's Tomahawk missiles. More importantly, U.S. President Donald Trump and Russian President Vladimir Putin are scheduled to meet in Budapest. With the prospect of a U.S.-Russian summit, market expectations for a ceasefire between Russia and Ukraine have eased, leading to a cooling of risk-averse sentiment. Gold prices, which had recently hit record highs, have since retreated to near $130.

The bullish support remains and the gold bull market has not changed

The current bull market in gold is supported by multiple factors. First, the Federal Reserve has resumed its interest rate cut cycle amid a weakening U.S. labor market. With the unemployment rate rising and the recent government shutdown exacerbating the situation, the U.S. job market is likely to deteriorate further, which suggests the Fed may take additional steps to lower interest rates.

Secondly, the US dollar's credibility continues to decline. On one hand, the US government's tariff policies have eroded the dollar's value. Meanwhile, President Trump's interference in the Federal Reserve and the Bureau of Labor Statistics has cast doubt on the central bank's independence. On the other hand, companies like Dongda are increasingly opting for non-dollar currencies in international trade settlements, pushing the de-dollarization trend to its limits.

Finally, rising gold prices could help alleviate debt pressures. With global economies burdened by mounting debts, the U.S. national debt continues to hit new highs. The likelihood of the U.S. government ending its shutdown suggests a higher debt ceiling is imminent. While the U.S. holds the world's largest gold reserves—approximately 8,133.5 tons (261.5 million ounces)—its official balance sheet value stands at just $11 billion (calculated at the 1973 price of $42.22 per ounce). Given the current market price of $4,300 per ounce, the actual value of these reserves has long surpassed $1 trillion. The gold price surge indicates a decline in U.S. debt-to-GDP ratio. From a debt mitigation perspective, gold prices still demonstrate upward potential.

The gold bull market is not over. The pullback is an opportunity

Chen Yu, senior analyst of Zhisheng Research (exclusively invited by Plotio), maintains that the fundamental drivers supporting gold's upward trajectory remain intact. The precious metal continues to ride a bullish market wave, with multiple favorable factors positioning it to test the $4,600 price level. As trade risks ease, the recent price correction may present an attractive entry window for investors.

[Important Disclaimer:The above content and views are provided by Zhisheng, a third-party cooperative platform, for reference only and do not constitute any investment advice. Investors who trade based on this information shall bear their own risks.]

In the event of any inconsistency between the English and Chinese versions, the Chinese version will prevail.This article is from Plotio. Please indicate the source when reprinting.