The US Dollar Is Loosening, Oil Prices Have Retreated, Gold Prices Have Rebounded Nearly 2%, And Gold Bulls Show Signs Of Relaunching Their Counterattack!

On Thursday, the global gold market staged a relatively strong rebound, reaching a nearly one-week high. This rally was driven by multiple factors, including a weaker dollar, continuous declines in oil prices, and falling US Treasury yields. Investors are digesting the impact of the Federal Reserve's latest rate hikes while reassessing gold's value as a safe haven and hedge. Although short-term fluctuations are inevitable, medium- and long-term support factors are quietly accumulating. 

There has long been a close negative correlation between gold and energy prices. In a market environment dominated by inflationary pressures, sharp declines in energy prices often help ease some of the pressure on the gold market. Oil prices fell for the second consecutive trading day this week, hitting a one-week low, mainly due to easing market concerns over supply disruptions. Reports say Saudi Arabia will supply more crude oil shipments through Oman, which has somewhat tempered expectations of higher oil prices driven by Middle East tensions. 

Meanwhile, the US dollar index retreated from its seven-week high. The weaker dollar directly lowered the cost for dollar-denominated gold to be purchased by holders of other currencies, thereby stimulating buying interest. The benchmark 10-year US Treasury yield fell in tandem, closing Thursday at 4.943%, down 6.1 basis points, marking the largest single-day drop in over three weeks. The decline in risk-free yields has weakened the opportunity cost of holding gold, further supporting gold prices. 

These factors combined led gold to quickly rebound after hitting a nearly six-week low the previous trading day. Market sentiment shifted from caution to positive, and short-term technical signs of recovery have also emerged. The Fed's decision to raise interest rates on Wednesday and subsequent. statements remain key variables influencing gold prices. This rate hike was unanimously approved, with the chairman clearly supporting it and hinting that further policy tightening may occur in the coming months. This effectively acknowledges that current inflationary pressures have not been effectively controlled, and policymakers remain cautious about further inflation worsening. The CME Group FedWatch tool shows that investors expect the probability of another Fed rate hike at its next October meeting to rise to about 51%, up from around 44% the previous day. 

Overseas central bank policies are also evolving in tandem. The Bank of England kept rates unchanged on Thursday but issued a warning about inflation and hinted at possible future rate hikes, causing the pound to weaken; The Bank of Japan is expected to raise rates to a 31-year high on Friday and signal that borrowing costs will continue to rise. 

Market Insight:

Geopolitical risks may become normalized, further boosting global central banks and market willingness to buy gold. In the short term, expectations of further Fed rate hikes and market sentiment fluctuations may still cause volatility, so close attention should be paid to the US dollar index and US Treasury yields; In the medium to long term, fiscal expansion, debt pressures, potential weakening of the US dollar, and eventual shift in monetary policy will provide a more solid support foundation for gold prices.