Middle East Tensions Ease, Gold’s Safe-Haven Appeal Weakens
U.S. President Trump announced that Israel and Iran have reached a ceasefire agreement and will begin nuclear talks next week. As tensions in the Middle East ease, the short-term demand for gold as a safe haven has noticeably weakened, pushing prices down.
Although both Israel and Iran claim to have achieved strategic objectives, experts warn that the underlying issues are not fully resolved, posing a risk of resumed conflict escalation. The UN's nuclear watchdog notes that the sustainability of Iran’s nuclear capabilities remains uncertain, which could become a catalyst for future gold price volatility.
Powell Reiterates Cautious Stance; Market Divided on Timing of Rate Cut
Federal Reserve Chairman Powell, during his congressional testimony, indicated that the new round of tariffs from the Trump administration might lead to “more persistent inflation risks,” necessitating a cautious approach to potential rate cuts. He stressed that the 2024 tariff measures differ from those in 2018 and that their specific impact on price trends and inflation expectations should be closely monitored.
Powell’s remarks reinforced a "wait-and-see" message, contrasting with Trump’s frequent pressure for rate cuts. Trump even claimed to have shortlisted three to four candidates for Powell’s succession, attempting to politically influence monetary policy direction.
Dollar Hits Low; U.S. Bonds Retreat, Supporting Gold Prices
With the market betting on an 85% chance of a rate cut in September, the dollar index continued to weaken, reaching its lowest since March 2022. Meanwhile, U.S. bond yields have slightly retreated, and market risk appetite has risen, although uncertainty remains.
Standard Chartered Bank analysis suggests that if Thursday's U.S. GDP and initial jobless claims data are lackluster, coupled with moderate PCE inflation data on Friday, it could further increase market bets on rate cuts, indirectly benefiting gold prices.
Weak Real Estate Data Might Strengthen Gold’s Safe-Haven Value
U.S. new home sales data for May showed a steep drop, with annualized sales falling to 623,000 units, the lowest in seven months, and the supply cycle surged to 9.8 months. Analysts believe this reflects a combination of low consumer confidence and rising home purchase costs.
The weakness in the real estate market is dragging on the outlook for U.S. economic recovery, making gold a choice for asset protection again. Some economists indicate that the rise in housing inventory might be a precursor to an economic slowdown, reinforcing gold’s value preservation function.
Technical Observation: Gold Prices May Remain Volatile in the Short Term
From a technical perspective, gold is consolidating above $3,300 per ounce. If it fails to break upward, a further pullback to the $3,120 area cannot be ruled out. However, if PCE data is below expectations or geopolitical risks recur, gold prices could challenge resistance above $3,400.
Intense Bull-Bear Battle in Gold Market Awaits Key Data for Direction
Gold is currently at the intersection of macro risk easing and policy uncertainty. Investors should focus on the progress of U.S.-Iran talks, Federal Reserve actions, and economic data for comprehensive guidance. In the short term, market movements may remain characterized by high volatility, warranting caution.
