Everbright Futures 0723 Gold Commentary: Gold Price Breaks Above 4100, Sustainability of Rebound Remains to be Seen

On July 22, COMEX gold broke above the 4100 mark, with a slight pullback at the close, settling at $4,135.0 per ounce, an increase of 1.44%. In the domestic SHFE night session, gold initially rose then fell, closing at 90.16 yuan per gram, an increase of 1.16%.

As the Federal Reserve enters its pre-meeting blackout period, market attention is focused on the US-Iran conflict. According to Reuters, yesterday Trump reiterated that the US does not need Hormuz; if Iran attacks a ship, the US will destroy a bridge or power plant. However, Iran warned of retaliation against US interests and facilities. In addition, US President Trump mentioned in a speech in Georgia that due to disagreements between Republicans and Democrats over spending priorities, there may be a federal government “shutdown” in September.

The renewed and escalating US-Iran conflict, along with bleak prospects for negotiation, has led to another rapid rise in prices. However, amid trading based on inflation and rate hike expectations, market sentiment is not pessimistic; instead, the focus appears to be shifting upward. The rally may be driven by a rebound in liquidity and risk preference following stability in the equity markets, but whether this can be sustained requires further observation. In the short term, it is recommended to remain defensive in response to the high-volatility environment. Continue to closely monitor the US-Iran conflict, Federal Reserve policy expectations, and whether overseas financial markets trigger liquidity risks under the outlook for higher interest rates.

Sources: Wind, Guangda Futures Research Institute

Written by: Shiyuemin

Professional Qualification: F03097365

Trading Advisory Qualification: Z0017563

Editor: Zhu Henan