$XAUUSD Our long-term bullish logic for gold has never changed: gold is the best asset to hedge against the credit risk of the US dollar.

The hollowing out of American industry has led to a spiral increase in US debt, and the long-term downward trend of dollar credit is certain. As long as this fundamental premise remains, gold’s strategic value as a “counterparty to the dollar” is intact. Even if short-term US debt yields rise, from a longer cycle perspective, it still presents a strategic window favorable to gold allocation.

02. Short- to medium-term dilemma: the “clamp” of triple pressures

Since we are long-term bullish, why do we currently see volatility? The core reason is “the old force has exhausted, the new force has not yet emerged.”

The previous drivers of gold—“interest rate cut expectations” and “central bank gold buying narratives”—have become dulled, and the new macro trend—“stagflation”—has not yet been officially established. During this gap, gold faces three powerful suppressive forces:

① The “conspiracy” of the petrodollar: surging crude oil to resolve debt

This is the most core implicit logic at present.

To repay massive debts and maintain dollar credit, the US has the incentive to push up oil prices. Under the petrodollar system, rising oil prices require more dollars for settlement, forcing central banks around the world to sell gold reserves in exchange for dollars.

The result is: gold declines, the dollar index stabilizes, oil prices rise, and debt pressures ease. This appears to be a “legitimate” debt resolution method, but it is actually a real bloodletting for gold.

② The “siphon effect” of AI: technology bubble’s grab on capital

Last year’s “barbell strategy” (one end AI, the other gold) among institutions has tilted this year.

The AI industry is booming, market expectations for tech stocks are extremely high, and capital is rushing into AI, naturally sidelining gold. There is a subtle “see-saw” relationship between AI and gold—referencing the rise of gold after the internet bubble burst in 2000, only after the AI bubble bursts and capital flows out will there be a re-embrace of gold.

③ Technical “time for space”

From the weekly MACD, although the fast and slow lines are approaching zero, they still need time to repair. We believe that gold “trading sideways for half a year or a year is reasonable” at this position.

Current volatility (about 23) still needs further convergence. Only when the market reaches consensus and a new macro trend emerges can gold break the deadlock.

03. Key projection: the second wave of crude oil shock

We predict that late June to July will be a critical window.

As excess crude oil reserves are depleted, oil prices are highly likely to enter a second wave of rise. This will once again suppress gold through the “inflation—US bond yields—real interest rates” pathway. Only when oil prices remain high at around $100 per barrel for a long time, triggering a complete economic “stagflation,” will a new major narrative for gold truly begin.

The process of “bottoming out” is often more painful than decline.
Final note: patience is the best strategy

Currently, gold is in a stage of “strategic optimism, tactical caution.”

Signal for a turning point: either geopolitical conflicts intensify, causing oil prices to surge and then sharply reverse; or the AI bubble bursts, leading to capital reflows; or the high oil prices stabilize, confirming “stagflation.”

Operational advice: before seeing clear macro trends (stagflation or AI collapse), stay patient and wait for volatility to further decrease.