Gold market analysis

Last week, the gold price continued to soar under the influence of global tariff policies. The market was highly sensitive to trade war news. Even the slightest movement had already caused hot money to flow rapidly. As a safe-haven currency, gold was particularly favored by the investment market. Therefore, during this sensitive period, the fluctuation range of the gold price also doubled. At the beginning of the week, the Trump administration announced that it would impose a 100% tariff on overseas-made films, reigniting trade disputes. 

The US aims to bring film production back to its home soil, but this move is not well-received by the market. Investors believe that it exerts pressure on the US film industry, and market risk sentiment has soared. Gold prices rapidly broke through the 3300 mark at the opening of the market, rising by another 100 dollars to a peak of 3435 dollars, and then awaits the Federal Reserve's interest rate decision. 

The market had long expected that the interest rate decision at this meeting would not involve a cut. However, Chair Powell made it clear that the Federal Reserve would be patient and not rush to cut interest rates, responding coolly to the pressure from Trump for an immediate rate cut. 

The Federal Reserve's willingness to keep interest rates high has put pressure on the high gold price. Gold has started to lose stability above 3,400. On Thursday, news emerged that the UK and the US reached a trade agreement, with the US maintaining a 10% tariff and the UK increasing its purchase of Boeing equipment and removing tariffs on some US products. Signs of compromise in the trade war led to a decline in gold prices. Additionally, Chinese Vice Premier He Lifeng will hold talks with US Treasury Secretary during his visit to Switzerland, raising market expectations for a trade war easing. Gold prices dropped from above 3,400 to as low as 3,274 dollars, and then rebounded with the support of bargain hunters. The price closed at 3,325 dollars for the week, rising by more than 2% for the week. 

Looking ahead to this week, it is believed that this informal meeting between China and the United States may not lead to an immediate agreement. However, if the atmosphere of the talks is relaxed, it still has the potential to ease market tensions. Conversely, it could further panic the market. 

In addition, the US will also release inflation data during the week. Although the last inflation data did not show significant upward pressure, imports and orders have nearly plummeted, which is bound to affect the price level. If inflation remains high and the labor market does not weaken, the Federal Reserve may be more patient in maintaining high interest rates, which will put pressure on gold prices. How do you see the market situation? Let's share our views.