Spot gold rises above $4,800, analysis: short-term gold prices will surge and then fall back repeatedly | Homebody Finance

Ask AI · Why the Easing of the Middle East Situation Pushes Gold Prices to New Highs?

【Zhai’nan Finance | Expert Roundtable】At the start of trading on the 8th, spot gold jumped sharply, breaking through the $4,800 level, up more than 2.3%.

According to a report by Xinhua News Agency, on the evening of the 7th, U.S. President Trump posted on social media that after a phone call with Pakistan, he agreed to pause airstrikes and attacks against Iran for two weeks, provided that Iran agrees to “fully, immediately, and safely” open the Strait of Hormuz.

On the early morning of the 8th, Iran’s foreign minister Araghchi announced on behalf of Iran’s Supreme National Security Council that the Strait of Hormuz would achieve safe navigation within a two-week period. The Secretariat of Iran’s Supreme National Security Council released a statement at local time on the 8th saying that Iran will hold two-week political talks with the United States in Islamabad, the capital of Pakistan, “to confirm the victory outcomes achieved on the ground in combat.”

With international gold prices surging, Li Gang, research director at the China Foreign Exchange Investment Research Institute, told Zhai’nan Finance in an analysis that first, although the Middle East situation has released signals of easing, the uncertainty of the outcome in turn strengthens demand for safe-haven assets, leading funds to more likely allocate to gold in advance to hedge tail risks; second, market expectations for the Federal Reserve’s rate-cut path are still swinging back and forth, and the expectation of falling real interest rates provides support for gold prices; additionally, against the backdrop of global central banks’ continued gold purchases and fiscal expansion, constraints on credit money weaken, which keeps lifting the valuation midpoint of gold in the medium and long term.

During the two-week negotiation window, how will spot gold prices move in the short term? Li Gang believes that gold prices will most likely enter a stage of “high-range consolidation + event-driven volatility amplification.” Over the next two weeks, it is expected that gold prices will be more likely to show a range-bound pattern of “rally—pullback—then repeat.” “If signals emerge during the period that negotiations are blocked or unexpected conflict escalates, gold could surge quickly; conversely, if it releases clear easing signals or even phase-by-phase agreement signals, a technical pullback is not out of the question.”

**　　(The views in the article are for reference only and do not constitute investment advice. There are risks in investing; enter the market with caution.)**

(Produced by Zhai’nan Finance, with Zheng Zhen and Dong Xiangyi as editor)