Core Viewpoint - The international gold price has shown resilience and rebounded after significant fluctuations, reflecting a complex interplay of geopolitical and macroeconomic factors [1][3] Group 1: Market Dynamics - Gold prices stabilized after hitting a low of $3207.73 per ounce, reaching a peak of $3260.47 per ounce during the day, with a daily increase of 0.8% [1] - The recent volatility in gold prices was primarily triggered by a breakthrough in US-China trade relations, where both parties agreed to significantly reduce tariffs [3] - The agreement entails the US reducing tariffs on Chinese goods from 145% to 30%, while China will lower tariffs on US goods from 125% to 10%, boosting global risk appetite and leading to a sell-off in gold [3] Group 2: Analyst Insights - ETO Markets' chief strategist noted that the tariff reduction marks a "fragile easing period" in global trade, suggesting that while short-term risk sentiment may suppress gold prices, there remains potential demand for gold as a safe-haven asset due to execution details of trade agreements and geopolitical tensions [4] - The rebound in gold prices is supported by three main factors: adjustments in economic growth expectations, a technical correction in the dollar, and fluctuations in inflation data [4] Group 3: Federal Reserve Signals - Recent comments from Federal Reserve Governor Kugler indicated that easing trade tensions may reduce the risk of an economic "hard landing," thereby diminishing the immediate necessity for interest rate cuts [5] - This statement led to a significant drop in the probability of a rate cut in July from 65% to 42%, and the expected annual rate cut was reduced from 55 basis points to 35 basis points, impacting the cost of holding gold [5] Group 4: Upcoming Economic Indicators - The focus is on the upcoming US May CPI data, which could determine the direction of gold prices; a core CPI increase above 0.3% may strengthen inflation concerns and challenge the dollar index, while lower-than-expected data could reignite rate cut expectations, potentially pushing gold prices towards $3300 [6] Group 5: Trading Strategies - Short-term traders are advised to monitor the $3200-$3280 range for potential breakouts, with a recommendation to consider light short positions if gold falls below $3200 post-CPI data [7] - Long-term investors are encouraged to maintain gold's strategic position in their portfolios, as ongoing geopolitical conflicts, central bank gold purchases, and expectations of declining real interest rates continue to provide long-term support [7] Group 6: Diverging Institutional Views - There is a notable divergence in market views on gold's future; Citibank has lowered its three-month target price for gold to $3150, citing delayed Fed policy shifts, while Goldman Sachs maintains that $3300 is not a ceiling, emphasizing ongoing de-dollarization trends and demand from emerging markets [9] Group 7: Market Transition - The gold market is transitioning from being driven by geopolitical risks to being influenced by macroeconomic data, with the recent easing of US-China trade tensions reducing the risk premium on gold, yet persistent global economic recovery imbalances and central bank policy uncertainties continue to support gold prices [10]

Group 1 - The global trend of interest rate cuts among major central banks has significantly slowed down in April, with only two banks (European Central Bank and Reserve Bank of New Zealand) implementing a total cut of 50 basis points [1] - In contrast to February, when half of the G20 central banks cut rates, the current focus is on the upcoming Federal Reserve meeting amid economic weakness and persistent inflation concerns [1] - The G20 central banks have only tightened by 25 basis points this year, while a total of 325 basis points have been cut through 12 rate cuts [1] Group 2 - Emerging markets show a similar trend, with only 4 out of 13 central banks that held meetings in April opting for a 25 basis point cut, while the remaining 8 maintained their rates [4] - Concerns over capital outflows due to dollar volatility and uncertainty in Federal Reserve policies have led some emerging market central banks to adopt a cautious approach [5] - Turkey unexpectedly raised its rates by 350 basis points to curb capital outflows, contributing to a total tightening of 550 basis points in emerging markets this year, while other central banks have implemented 850 basis points of easing through 14 rate cuts [5]

Investment Rating - The report indicates a mixed outlook for the manufacturing and services sectors in the U.S., with manufacturing showing signs of weakness while services demonstrate resilience [4][3]. Core Insights - The U.S. manufacturing PMI for February was reported at 50.3, below expectations of 50.8, indicating a slight expansion in manufacturing activity. Notably, the new orders index fell by 6.5 percentage points, reflecting a significant decline in demand [4][3]. - In contrast, the ISM services PMI for February was reported at 53.5, exceeding expectations of 52.5, suggesting an acceleration in service sector expansion [4][3]. - The services employment index rose to 53.9, while the prices index increased by 2.2 percentage points to 62.6, indicating persistent cost pressures that are being passed on to consumers [3][4]. Summary by Sections Manufacturing Sector - The manufacturing employment index and new orders index both saw significant declines, with the new orders index dropping to its lowest level since May of the previous year [4][8]. - The manufacturing prices index surged to 62.4, significantly higher than the expected 56.3, indicating accelerated price growth [4][3]. Services Sector - The services sector showed resilience with a PMI of 53.5, reflecting a faster expansion rate compared to previous months [4][3]. - The services new orders index saw a slight increase, while the employment index experienced its first decline in three months [8][3]. Inflation and Economic Outlook - The report highlights persistent inflationary pressures, with the manufacturing prices index remaining above 60 for three consecutive months, indicating sticky inflation in the U.S. economy [3][4]. - The overall economic outlook suggests a potential shift towards "stagflation" as manufacturing demand weakens while costs remain high [4][3].