BlockBeats News, March 20th, Geopolitical conflicts usually escalate market risk-off sentiment, driving up the price of gold. For example, after the Russia-Ukraine conflict broke out in February 2022, the price of gold rose rapidly within two weeks. However, since the US conflict broke out, oil and the US dollar have risen sharply, while gold has experienced a continuous downward trend.
Qiu Rui, Senior Deputy Director of Research and Development at Orient Securities, stated that the ongoing Middle East war has pushed up oil prices, fueling global inflation expectations, which may strengthen the Federal Reserve’s stance on keeping interest rates unchanged, suppressing precious metals. Adrian Ash, an analyst at BullionVault, said, “The timing of future rate cuts by central banks will be further delayed. From a technical perspective, this is unfavorable for gold.” Daniel Ghali, Commodity Strategist at TD Securities, stated, “In the short term, we still believe that there is downside risk in the market. Gold still has significant room for decline, but at the same time, it can maintain the support formed during its bull market uptrend.” Daniel Pavilonis of commodity brokerage firm RJO said, “If the current war continues, stocks and precious metals will continue to decline, and we may even see the gold price fall back to $4200 per ounce.”
Nicholas Frappell, Global Institutional Market Director at ABC Refinery, stated that gold has held some important technical support levels on the weekly chart, and the price of gold may rebound to around $4800 per ounce, a level it previously fell below. Carsten Menke, Head of Research at Julius Baer, stated that in the tense situation in the Middle East, gold can only truly rise if the financial markets show more pronounced risk-off sentiment.
CITIC Securities pointed out that the medium-term trend of gold prices after each Middle East conflict still depends on US dollar credit and liquidity factors. Looking ahead to this round of conflict, it is expected that the continuation of the two major trends of loose liquidity and weakened US dollar credit will continue to drive up the price of gold. Bullish on the gold sector’s stock prices being driven to new highs by the gold price hitting new highs. Previously, Bank of America expected the price of gold to rise to $6000 per ounce within the next 12 months. UBS expects the international spot gold price to reach $6200 per ounce in the coming months.
