Behind the Gold Shock: Who is Leading the Price 'Roller Coaster'?

Recently, the gold market has experienced severe fluctuations, with spot gold prices falling below the psychological level of $3000 per ounce during trading, hitting a new low since March 17th. Behind this fluctuation is the result of the interweaving of multiple repeated and mixed factors, which not only includes the intense release of short-term market sentiment, but also reflects the deep changes in the global macroeconomic landscape.

From a technical perspective, the trend of gold prices exhibits typical long short game characteristics. On April 3rd, the gold price surged to $3167.60 before rapidly falling back. On April 4th, it plummeted 2.47% in a single day, forming a "double top prototype". The initial appearance of MACD dead cross and technical signals amplified by the green bar both indicate an increase in bearish momentum. However, the RSI index is approaching the oversold threshold of 40, indicating a short-term technical rebound demand. The contradiction of this technological form is essentially a pricing divergence between geopolitical risks and economic recession expectations in the market - the escalation of the Middle East situation has boosted the demand for safe haven, but the unexpected US non farm payroll data in March has strengthened the expectation of a cooling probability of the Federal Reserve's interest rate cut in June, leading to fierce competition between long and short sides at the $3000 mark.

The impact of macroeconomic factors on gold prices exhibits structural characteristics. The fluctuation of the Federal Reserve's policy shift towards expectations has become the core variable suppressing gold prices. Despite the signal of "two interest rate cuts within the year" released at the March interest rate meeting, the strong data of 236000 new non farm jobs and 3.5% unemployment rate in the United States in March caused the market's probability of a rate cut in June to plummet from 76% to 65%, driving the US dollar index to rebound to 103.81. The fluctuation of this policy expectation directly leads to a decrease in the attractiveness of gold as a zero interest asset. At the same time, the liquidity run caused by the global stock market crash is significant, with the Nasdaq index plummeting 22.7% in a single week, forcing some investors to sell gold to make up for their stock margin needs, further exacerbating the downward pressure on gold prices.

Geopolitical risks and central bank gold purchases form price support. The escalation of the Middle East conflict and the fragility of negotiations between Russia and Ukraine continue to boost market risk aversion, while the continuation of global central bank gold purchases provides medium - to long-term support for gold prices. In 2024, the global central bank's gold purchases accounted for 20% of the supply, and China increased its holdings of 160000 ounces of gold in March. This structural demand played a bottoming role in technical oversold. However, it should be noted that the inflow rate of gold ETF funds has significantly slowed down since April. Without new driving factors, the gold price may fall into a range oscillation.

The game between the temporary rebound of the US dollar and inflation expectations exacerbates price fluctuations. The weak Eurozone economy and weakened safe haven nature of the Japanese yen provide short-term support for the US dollar. If the US March CPI data released in mid April is higher than the expected 3.7%, it may weaken the market's bet on the Fed's interest rate cut and drive the US dollar index to rebound. Historical data shows that gold is highly negatively correlated with real interest rates, and if the current 10-year TIPS yield in the United States continues to rise, it will directly suppress the performance of gold prices. But if the Middle East conflict spreads to the Strait of Hormuz, it may push gold prices to soar by more than 5% in a single day. The existence of this geopolitical risk premium makes it difficult for gold prices to form a trend downward.

From a market game perspective, COMEX's open interest contracts have reached a three-year high, with implied leasing rates soaring to 12%, indicating a white hot long short game. The 4-hour MACD green bar shortening and KDJ low passivation suggest a short-term need for oversold repair, but if the rebound fails to break through the resistance zone of $3080-3114, the downward trend may continue. The resonance between this technical feature and fundamental factors may lead to a short-term trend of "opening low, moving high, and recovering from volatility" in gold prices. However, caution should be exercised against the potential programmatic trading sell-off that may be triggered when the price falls below $3015 and the US dollar index stabilizes at the 104 level.

From a medium to long term perspective, the long-term logic of global economic fragmentation, rising debt risks, and central bank gold purchases remains unchanged. The marginal changes in the Federal Reserve's policy path and geopolitical risks remain the core variables affecting gold prices. If the gold price stabilizes at $3050 and the trading volume increases, you can take a light position to chase after the long position; If it falls below the $2930 (100 day moving average), one should be cautious of a deep correction. For ordinary investors, it is recommended to maintain a medium-term perspective of "callback is opportunity" and adopt a combination strategy of "rebound short selling+oversold rebound", while paying attention to the allocation value of gold ETFs and physical gold bars.

The current volatility in the gold market is essentially a reflection of global macroeconomic uncertainty. The underlying logic behind the volatility of gold prices is the fluctuation of the Federal Reserve's policy shift towards expectations, the persistence of geopolitical risks, the volatility of the US dollar index, and the divergence of global central bank gold purchasing behavior. Investors need to be wary of the interweaving of short-term technical adjustments and long-term structural opportunities, grasp trends in volatility, and seek certainty in uncertainty.