1. Review of Today's Market Conditions

On May 18th, during the Asian market session, spot gold fell below the $4,500 per ounce level for the first time since late March, with the intraday low reaching $4,484.788, a decline of up to 1.2%. Regarding jewelry, Lao Feng Xiang's pure gold jewelry was priced at 1,383 yuan per gram, down 15 yuan from the previous day.

This round of decline is mainly due to the concentrated release of previous negative factors. Last Friday, spot gold dropped 2.45% to $4,538, with a weekly decline of 3.75%.

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2. Breakdown of Core Bullish and Bearish Factors

Bearish Factors | Bullish Factors
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The US dollar index continues to rise, with US Treasury yields reaching a nearly one-year high | Central bank gold purchases continue to support, with global central banks increasing reserves by 244 tons in Q1 2026
April US CPI year-over-year rose 3.8%, exceeding expectations, boosting rate hike expectations | Middle East tensions fluctuate, providing safe-haven support for gold
ETF outflows persist, with SPDR holdings decreasing by 2.57 tons | UBS maintains a year-end target price of $5,600, with the medium- and long-term outlook unchanged
Gold, as a non-interest-bearing asset, faces increasing opportunity costs | Morgan Stanley predicts that after easing rate hike expectations, gold could return to an upward trend

From a technical perspective, after breaking below the key psychological level of 4,500 today, market sentiment has become more cautious, and short-term inertia-driven downward pressure remains.

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3. My Forecast and Trading Strategy

Short-term (remaining May): Volatile and slightly weak, mainly looking for a bottom. The fundamental factors supporting this decline are unlikely to reverse in the short term: on one hand, April’s CPI YoY of 3.8% is the highest in two years, and the Fed may even consider rate hikes before the end of the year; on the other hand, with support levels at 4,750 and 4,625 repeatedly broken, the next technical support zone is around 4,400-4,450. Any rebounds before that should be approached with caution.

Medium-term (within the year): Gold still has the potential to reach new highs, and corrections are opportunities for phased accumulation. The core logic supporting this view includes three points: first, central bank gold purchases are no longer just short-term safe-haven moves but reflect strategic adjustments in reserve structures, with de-dollarization trends exerting a much greater influence on gold prices than safe-haven events alone; second, structural issues in the US labor market remain unresolved, and although rate hikes are delayed, the direction is unlikely to change, ultimately exerting continuous pressure on real interest rates; third, gold’s hedging value in diversified investment portfolios is increasingly recognized, and the return of institutional demand is only a matter of time.

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