Gold Commentary: With the adjustment of overseas interest rate cut expectations, how long will the oil continue to rise and gold to fall?

The Middle East situation remains tense. Overnight, London spot gold fluctuated before turning weaker, with COMEX gold futures falling 1.83% and SHFE gold down 0.94%. Overnight, oil prices in the market continued to surge: Brent crude rose to nearly 10% at one point and closed above $100 per barrel. The U.S. Dollar Index hit a nearly two-month high, and the yield on 2-year U.S. Treasuries quickly spiked, weighing on precious metals. The jump in oil prices reduced expectations for Fed rate cuts, and the U.S. president once again pressured the Federal Reserve. The U.S.-Iran situation has not ended yet, and in the short term gold continues to trade in a high-level range.

On the news front, U.S. Trade Representative Grier said the U.S. will launch a Section 301 investigation into 16 trading partners, including China, the European Union, Mexico, Vietnam, India, and Japan. From a geopolitical perspective, Iran’s Supreme Leader issued his first statement since taking office, saying he will not give up revenge, and the Strait of Hormuz will continue to be closed, with new fronts to be opened if necessary. The conflict between the U.S. and Iran is full of uncertainty, and the recurring nature of geopolitics will remain a key factor in trading in the near term. Gold’s recent price action shows a certain negative correlation with crude oil and the U.S. dollar, and a positive correlation with U.S. equities, indicating that the gold market also has concerns about liquidity. Given the ongoing volatility of geopolitics, in the short term, the timing of strategy matters more than choosing a direction. (Everbright Futures)