Gold’s closing price at the end of May is expected to be in the 4350–4400 range.

The macro logic remains unchanged—both inflation and geopolitics provide support, and gold in May is expected to undergo a V-shaped rebound to above 4600.

Today, spot gold fell below 4500, and bearish sentiment is running high in the market. Technical traders are calling for 4300 and even lower. But I want to remind everyone: don’t be misled by short-term volatility. The foundation of gold’s macro bull market has not been shaken. The remaining two weeks of May are precisely an excellent opportunity to buy on dips. I expect the gold price to reclaim above 4600 by the end of the month. On Polymarket, the option “above 4600” is worth revisiting with renewed emphasis.

Why am I so optimistic? Three core reasons:

First, US inflation is far stickier than expected. The 4月 CPI released last week showed YoY of 3.4%, and core CPI YoY was 3.6%, both higher than the previous readings. More importantly, super-core CPI (services inflation excluding housing) rose 0.5% month-over-month, the largest increase this year. This means it will be difficult for the Federal Reserve to kick off a rate-cutting cycle in the near term, but it also indicates that “real interest rates” are still negative (nominal interest rate minus inflation expectations). In a negative real interest rate environment, gold’s demand for value preservation will only strengthen—not weaken. The market previously over-priced “three rate cuts this year.” Now, even though the expectation has been revised to “one rate cut or no rate cuts,” gold prices have already priced in most of the downside. Once the most pessimistic phase passes, any dovish news will trigger a violent rebound.

Second, geopolitical risk is being re-priced. Over the weekend, tensions in the Middle East heated up again: clashes between Israel and Hezbollah in Lebanon escalated, and attacks on Red Sea merchant ships increased. At the same time, Russia launched a new round of offensives in eastern Ukraine. Geopolitical risk premium pushed gold up to 4700 in April, but then it receded. However, the latest signs suggest the conflict is not easing—it’s expanding instead. As the ultimate safe-haven asset, gold often rises independently of the dollar and US Treasuries during periods of geopolitical turmoil. Historical data shows that when the global geopolitical risk index (GPR) is above 100, gold’s average excess return reaches 1.5% per month. Currently, the GPR index is 127, and it is still rising.

Third, technically, oversold conditions and buy-side support. When gold broke below 4500 today, looking at the intraday chart shows that trading volume did not expand abnormally; instead, a bearish “downside shrinking volume” divergence signal appeared—new price lows, but RSI lows rising. This is an early sign of bearish exhaustion. In addition, during the Asian session (10:00–12:00 Beijing time), there were clearly large buy orders. The premium on the Shanghai Gold Exchange expanded to 5 US dollars per ounce, indicating that physical dip-buying funds are entering the market. Below 4500 is the “value zone” for long-term allocations by central banks and institutions. Over the past year, global central banks have net purchased over 1000 tons of gold, and this trend will not change because of a 1% single-day drop.

Someone might ask: with the dollar so strong, how could gold rise? Note that the negative correlation between gold and the dollar is not absolute. When risk-hedging sentiment dominates, the dollar and gold can rise and fall together. This has happened in March 2020 and February 2022. The current market is worried about both inflation and recession (stagflation). In a stagflation environment, gold is one of the best-performing assets.

In terms of execution, I have already placed buy orders in my spot account, entering at 4480, with a stop-loss set at 4400, and a target of 4650. At the same time, on Polymarket, I allocated funds to two options—“4600-4700” and “above 4700”—to bet on higher odds with a small amount of capital. If you also believe the market is overly pessimistic, feel free to position contrarily with me. Remember: when others are fearful, I am greedy.

My prediction: by the end of May, the gold price will rebound to 4630–4680 US dollars.
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