M4Markets: Gold's rebound momentum is limited; overall still in a correction zone

April 1st, gold prices have seen a modest rebound recently, but the overall trend is still under pressure. Against the backdrop of continuously rising global energy prices, inflation expectations have clearly warmed up, suppressing the appeal of non-yielding assets represented by gold. Although gold prices show signs of recovery during the day, judging from monthly performance, they are still in a clearly declining range overall, indicating that the market’s repricing of the future interest-rate path is dominating the precious-metals trend.

From the perspective of driving factors, geopolitical conditions remain an important variable affecting the market. At one point, market sentiment warmed up due to news that suggested the conflict might ease, providing short-term support for gold. However, uncertainty surrounding key energy corridors has not been eliminated, which means energy supply risks may still persist, offering support for inflation. Relevant developments show that energy prices running at high levels not only raise overall price expectations, but also intensify market concerns about monetary policy tightening, thereby limiting the room for precious metals to rebound.

Meanwhile, changes in interest-rate expectations continue to exert ongoing pressure on gold. As market expectations for rate cuts cool down, and even some regions release signals of further tightening, bond yields rise overall, increasing the opportunity cost of holding gold. In this environment, although there is still safe-haven demand, funds are more inclined to flow into assets with yield characteristics, weakening gold’s appeal for allocation. Other precious metals also show similar trends, with overall volatility noticeably increasing.

From the perspective of market performance, although short-term rebounds bring some support, gold still faces phased adjustment pressure. After a continuous multi-month uptrend is broken, market sentiment becomes more cautious, and investors start to reassess how changes in the macro environment affect asset prices. Especially amid the intensifying contest between inflation and interest rates, precious-metals performance is more likely to be hit by shifts in expectations.

Overall, the current precious-metals market is at a stage where long and short factors are intertwined. On the one hand, geopolitical risk and inflation pressure provide support; on the other hand, rising interest-rate expectations and changes in capital flows also exert pressure on it. In the short term, gold prices may maintain a range-bound pattern, and future performance will depend more on how inflation evolves and the direction of monetary policy becomes clearer.

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Editor-in-charge: Chen Ping