Industry insiders: Long-term trend of gold prices will shift

Zeng Gang, dean of the Tianfu Liyan Institute of Finance, said in an interview with reporters, "The sharp fluctuations in gold prices this year are essentially the result of multiple driving forces taking turns to dominate." "Entering the second half of the year, the situation reversed. Rising international oil prices pushed up inflation expectations, U.S. inflationary pressure resurfaced, and the market began betting that the Federal Reserve might raise interest rates further. Higher real interest rates and a stronger dollar directly raised the opportunity cost of holding gold, a non-yielding asset." Regarding the sharp drop on October 30, Zeng Gang further expressed his views: "On October 30, crowded long positions at high levels were closed out, and stop-loss orders were triggered in concentrated fashion, which amplified the decline and created a stampede." Zeng Gang believes that in the short term, gold prices are still dominated by monetary policy expectations and dollar movements. Before inflation data cool noticeably and expectations of Fed rate hikes fade, a rebound in gold prices may be limited, and prices are likely to fluctuate widely at low levels. However, after two consecutive months of declines and an excessively large short-term drop, a rebound after technical oversold conditions could occur at any time. Investors should not blindly bottom-fish, still less chase the decline; batch purchases with small positions are more prudent. In the long term, several fundamental logics supporting gold have not fundamentally disappeared. Global geopolitical uncertainty, high sovereign debt, central bank reserve diversification and the "de-dollarization" trend will still provide medium- and long-term support.