CICC: Gold investment demand and prices may both have room for upward correction

Mars Finance news, according to a report by JIN10, a research note from CICC suggests that the U.S.-Iran conflict has caused a sharp spike in oil prices; the risk of “inflation” takes precedence, and the market’s expectations for the Federal Reserve’s rate-cut path have shifted, creating selling pressure for the gold ETFs that were increased last year. At the same time, a liquidity shock has also helped drive a short-term pullback through the futures and options market.

The current geopolitical situation in the Middle East may be entering a critical window. Oil prices face a choice between moving up or down, and the focus of pricing in the gold market may shift to assessing how supply shocks affect “stagflation.” The already preliminarily priced-in rate-hike expectations may need to be adjusted. Looking ahead, CICC believes that whether it is an oil-price pullback after a downgrade in geopolitics, a return of monetary policy to a more accommodative direction, or supply shocks that intensify recessionary pressure and trigger a clearer display of gold’s safe-haven value—there may be room for both gold investment demand and prices to recover upward.