Core Viewpoint - The recent geopolitical tensions in the Middle East, particularly the U.S. airstrikes on Iranian nuclear facilities, have heightened demand for gold as a safe-haven asset, while the Federal Reserve's decision to maintain interest rates has added to market uncertainty [1][2][4]. Geopolitical Tensions - The U.S. confirmed successful strikes on three Iranian nuclear sites, escalating concerns over regional stability and prompting fears of further conflict [2]. - Iranian officials have threatened to close the Strait of Hormuz, a critical shipping route, in response to U.S. actions, indicating potential for increased military engagement [2]. Gold Market Dynamics - Gold prices experienced a decline of $64.95 or 1.89% last week, closing at $3468.52 per ounce, following a brief surge due to geopolitical tensions [1]. - Despite the recent drop, the demand for gold is expected to rise as investors seek refuge amid escalating geopolitical risks [3]. Federal Reserve Policy - The Federal Reserve maintained its benchmark interest rate, with 7 out of 19 officials suggesting no rate cuts are advisable this year, marking the fourth consecutive meeting without a change [4][5]. - The Fed's latest dot plot indicates a median federal funds rate of 3.9% for 2025, suggesting potential for future rate cuts depending on economic conditions [4]. Market Sentiment and Expectations - Market expectations for a rate cut by the end of the year hover around 50 basis points, with any hawkish comments from Fed officials likely to impact the dollar and interest rate outlook [6]. - Investors are closely monitoring upcoming testimonies from Fed Chairman Jerome Powell for insights into future monetary policy [5]. Gold Holdings and Investment Trends - Central banks are expected to increase their gold reserves, with 95% of surveyed banks anticipating growth in their holdings over the next 12 months [7]. - The SPDR Gold Trust, the largest gold ETF, saw an increase in holdings by 9.75 tons, reaching a total of 950.24 tons, marking the fifth consecutive week of accumulation [7]. Technical Analysis - Gold prices are currently in a bullish trend, with key resistance levels identified between $3400-$3424 and $3450-$3500 per ounce, while support levels are noted at $3372-$3360 and $3315-$3300 per ounce [7]. Domestic Market Insights - In the domestic market, gold futures have shown resilience, with key support at 775 CNY per gram and resistance levels identified between 790-795 CNY per gram [8].

Core Viewpoint - The rapid warming of market risk appetite has led to a significant decline in international gold prices during the week of May 12-16, with a drop of $124.29 or 3.74%, marking the worst week since November of the previous year [1] Market Dynamics - The optimism surrounding trade relations and the delayed expectations for the Federal Reserve to restart interest rate cuts are the primary reasons for the weakening gold prices [1][2] - The recent slowdown in U.S. inflation data, coupled with economic data falling short of expectations, has reinforced the anticipation of further rate cuts by the Federal Reserve this year, helping gold prices maintain above the $3200 per ounce mark [1] Economic Indicators - The U.S. consumer confidence index from the University of Michigan dropped significantly to 50.8 in May, down from 52.2 in April and below the market expectation of 53.4, marking the lowest level since June 2022 [4] - The Federal Reserve's Chairman Jerome Powell indicated that inflation may become more volatile and that the Fed is adjusting its overall policy framework in response to significant changes in the economic environment since 2020 [3] Geopolitical Factors - The easing of geopolitical tensions, such as the maintenance of the India-Pakistan ceasefire and the resumption of direct negotiations between Russia and Ukraine, has contributed to a decrease in market anxiety [2][6] - However, the path to peace remains challenging, and the geopolitical landscape continues to influence market sentiment [5] Credit Rating Impact - Moody's downgraded the U.S. sovereign credit rating from Aaa to Aa1 due to increasing government debt and interest payment ratios, which may lead to further fluctuations in gold prices [7] Market Positioning - There are signs of renewed bullish sentiment in the gold market, with an increase in open interest in gold futures contracts on the Chicago Mercantile Exchange [8] - Despite a decrease in speculative net long positions, there was a slight increase in long positions after seven weeks of decline, indicating potential market recovery [8] Technical Analysis - Gold prices rebounded after dipping to $3120 per ounce, with resistance levels identified between $3263 and $3293 per ounce, and critical support at the $3200 mark [8]