【TMGM Financial Recap】Gold Prices Continue To Climb, PCE Data And Walsh's Debut Coincide With The Debut, Marking A Critical Period For The Bullish Frenzy!
The global gold market is experiencing a remarkable rally. On Monday, spot gold continued its strong momentum from last week, reaching as high as $4,680 per ounce intraday, marking a more than three-month high since May 14. London spot gold has steadily climbed below $4,100, with a cumulative gain of over 13% since August. Gold prices closed higher for the third consecutive week, with weekly gains exceeding 5%, strongly breaking through the key $4,600 mark.
At the start of this week's trading, both fundamental and technical factors showed favorable trends for the gold market. Treasury yields have stabilized or even declined slightly, providing solid support for gold prices. In the coming weeks, the path with least resistance for gold prices will continue to be sideways consolidation or further gains, unless a technical reversal signal appears.
The dollar's movement is one of the core drivers behind this round of gold price increases. The US Dollar Index previously fell to a three-month low, and although it rebounded slightly on Monday, overall it remains weak. The fundamental reason for the continued weakening of the dollar lies in multiple mistakes in the U.S. military, geopolitical, and financial spheres, which have led to a decline in the dollar's safe-haven value. For gold, a weaker dollar
means that gold priced in dollars becomes relatively cheaper for non-dollar investors, directly lowering purchase costs and stimulating a rush of buying interest. More importantly, market concerns about the sustainability of U.S. fiscal policy are fundamentally undermining the credit foundation of the dollar.
The dollar's weak adjustment is not a short-term phenomenon. Combined with midterm election pressure, expectations of passive fiscal tightening, and the trend of US Treasuries, the US dollar may weaken further in the medium term, with the yearly high possibly appearing. This provides long-term structural support for gold's sustained upward trend. The U.S. Treasury's aggressive intervention in the bond market was the key catalyst for accelerating this round of gold trading. The market has begun to reassess the relationship between U.S. fiscal policy and bond yields, significantly boosting gold's appeal as a credit alternative to the dollar.
On Monday, the U.S. announced an expansion of its secondary sanctions against Iran, but the market remains generally skeptical about the actual effectiveness of this round of sanctions. But regardless of the actual effectiveness of the sanctions, geopolitical tensions alone are enough to support market risk aversion. The market is currently awaiting two key events; The U.S. Personal Consumption Expenditures (PCE) Price Index released on Wednesday, along with Fed Chair Walsh's first speech at the Jackson Hole Global Central Bank Symposium on Friday.
PCE is the Fed's preferred inflation gauge, and its results directly affect market expectations for interest rate paths. A research report from an institution pointed out that if PCE data remains weak, expectations for rate cuts may strengthen, and gold prices could recover above $5,000. Walsh's Jackson Hole debut was especially influential. Since taking office, Wash has
reduced forward-looking guidance and pushed for adjustments to the Fed's policy communication approach. If his speech sends a dovish signal, market rate hike expectations cool, and precious metals may gain new momentum; If it emphasizes inflation risks and sends a hawkish signal, the US dollar and US Treasury yields may strengthen, putting pressure on precious metals in the short term.
Market Insight:
Gold continues to rise at the 4-hour level, with the MACD double line and volume bars converging above the zero axis. PCE data may trigger a repricing of inflation expectations, Walsh's remarks at Jackson Hole may surprise the market, and overbought technical indicators could trigger profit-taking. But from a medium- to long-term perspective, the underlying logic supporting gold's upward movement has not changed.
