Everbright Futures 0316 Gold Commentary: Weekly Gold Oscillates Weakly, Focus on Federal Reserve Meeting This Week

Hot Topics

Selected Stocks Data Center Market Center Capital Flows Simulated Trading

Client

Last week, gold experienced volatility and weakened, with London spot gold falling 2.97% for the week to $5,018.098 per ounce. Focus on this week’s Federal Reserve March meeting.

In terms of data, the U.S. Department of Labor announced that February’s CPI year-over-year remained at 2.4%, and core CPI dropped to 2.5%, both in line with expectations, indicating that inflation has not spiraled out of control due to previous oil price increases. However, markets are more focused on March data. Additionally, structural issues in the employment market remain prominent, with initial jobless claims at 213,000, below expectations, suggesting limited layoffs and contrasting with a sharp drop in non-farm payrolls. Geopolitically, the Russia-Ukraine conflict continues to escalate, with prospects for ceasefire negotiations growing dimmer; more critically, the Middle East situation remains tense, with the Strait of Hormuz blockade crisis unresolved, international oil prices rising steadily, Iran’s highest authority completing a leadership transition and launching “chain reactions” against the U.S. and Israel, warning of attacks on relevant oil tankers, with geopolitical premiums continuously fueling commodity prices.

Amid ongoing U.S.-Iran tensions, the gold market faces conflicting sentiments. Rising oil prices boost inflation expectations, which is beneficial for gold, but may also cause global central banks to delay monetary easing, raising concerns about liquidity risks amid stock market volatility. This week, the Federal Reserve’s March meeting will be held, with a rate decision and dot plot released early Thursday. The market generally expects no change, but focus remains on how Powell assesses the dual risks of inflation and growth triggered by Middle East oil price surges. If the dot plot continues to lower easing expectations, gold prices may be temporarily suppressed; however, if the Fed acknowledges rising stagflation risks, it could reinforce gold’s strategic value. The main market focus remains on geopolitical issues, as the Strait of Hormuz blockade directly threatens 20% of global oil supply. If conflicts spill over into energy infrastructure, further oil price increases could drive funds into gold to hedge inflation risks. Strategically, a buy-the-dip approach is still recommended. Whether future inflation or stagflation expectations dominate, gold’s strategic allocation will be enhanced. Under liquidity concerns, this also presents investors with opportunities to buy on dips.

Written by: Li Qi

Professional Qualification: F3046227

Trading Advisory Qualification: Z0016145

Disclaimer: The information in this report is sourced from public data. Our company makes no guarantees regarding the accuracy, reliability, or completeness of this information, nor do we guarantee that the information and advice contained will not change. We strive for objectivity and fairness in the report, but the views, conclusions, and recommendations are for reference only and do not constitute specific product or business endorsements or operational guidance. Investors are responsible for their own investment decisions and risks, which are unrelated to our company and authors.

Sina Partnership Platform, Everbright Futures Account Opening, Safe and Secure

Massive Information, Precise Analysis, All on Sina Finance APP

Editor: Zhu Hennan