Gold, three consecutive gains!

【Intro】 Gold Posts Three Straight Days of Gains

By China Fund News reporter Taylor

On the evening of April 1, gold prices rose for the third consecutive day, climbing as much as 2% during the day. Market signals indicate that the Middle East war may be nearing its end, and traders’ focus has shifted from interest-rate hikes to the risk of prolonged economic downside.

Earlier, Trump said he expects the United States to end its war with Iran within two to three weeks. This suggests the U.S. has basically achieved its military objectives and will have other countries handle the restarting of navigation through the Strait of Hormuz.

Against this backdrop, stocks have risen and the dollar has fallen. Bond traders have scaled back their bets on central banks raising rates to hedge inflation risks triggered by the conflict, and instead turned their attention to how the war could affect economic growth. Federal Reserve Chair Powell earlier this week said that long-term inflation expectations remain stable.

Analysts said: “When the market narrative shifts from inflation to growth risks, gold’s safe-haven characteristics often reappear. We are highly confident that there is limited room for Fed rate hikes in this cycle, and that the policy focus will shift to a weak labor market. Since gold does not pay interest, lower interest rates are a positive for it.”

Despite a rebound over the past few days, gold in March is still down nearly 12% in total, recording the worst single-month performance since October 2008. The Middle East war, now in its fifth week, has disrupted global markets and has constrained the supply of energy and other commodities, raising fears of a surge in inflation that for a time outweighed gold’s traditional appeal as a safe-haven asset.

Goldman Sachs Group still maintains a bullish view on gold. In a report released on Tuesday, analysts kept their year-end forecast at $5,400 per ounce, citing ongoing purchases of gold by central banks and expectations that the U.S. will cut rates twice this year.

The White House press secretary said Trump will give a speech on Wednesday evening on the Iran issue, providing “important updates.” However, Trump has been oscillating between “an agreement that is about to be reached” and “a threat to escalate military action.”

Iran has also put forward conditions for ending the conflict, including control of the Strait of Hormuz—a waterway that before the war handled about one-fifth of global oil and liquefied natural gas shipments. The Iranian president said that if the relevant demands are met, Iran is ready to end the war.

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Editor: Song Yafang