Guangda Futures 0522 Gold Review: Bull and Bear Intertwined, Gold Price Weakens Short-term

Overnight, COMEX gold prices fluctuated and strengthened, but weakened after this morning's opening, as market sentiment turned cautious amid the ongoing tug-of-war between bullish and bearish factors.

On the macro front, the US May composite PMI preliminary value recorded 51.7, holding steady from April, indicating that overall business activity maintained moderate expansion. However, there was significant structural divergence: manufacturing PMI exceeded expectations and rose to 55.3, a 48-month high, showing strong resilience in manufacturing; while services PMI was only 50.9, hovering on the verge of stagnation, reflecting diminished consumption momentum in domestic demand. The divergence between manufacturing and services exposes the underlying contradictions in the economic structure impacted by tariff policies and has to some extent heightened market concerns about a stagflation trajectory.

In terms of geopolitics, the US-Iran negotiation situation remains volatile. US Secretary of State Rubio expressed a cautious attitude towards reaching an agreement, using careful wording. However, reports from the Middle East direction showed major progress in the negotiations, with Iran stating it is responding to the negotiation text sent by the US and that differences have narrowed. With Pakistan mediating, the agreement text is reportedly undergoing “final touches.” Mixed news continues to cause market trading logic to fluctuate, and uncertainty persists.

Regarding events, the most closely watched event in the Eastern Time Zone tonight is that Kevin Walsh will be formally sworn in as the 17th Chair of the Federal Reserve at the White House, with Trump personally presiding over the ceremony—a high-profile occasion that has drawn significant market attention to his first official speech. Previously, Walsh advocated “reshaping the Federal Reserve,” emphasizing its independence and promoting balance sheet reduction, with a somewhat hawkish stance. Against the backdrop of persistent inflationary pressures, if his initial statement is hawkish, it may further suppress market expectations of rate cuts and exert a negative impact on gold; conversely, if his tone is more dovish, gold could see a short-term stabilization opportunity. The market may adopt a cautious approach, waiting for Walsh's “debut” to play out.

In summary, the structural divergence in macro data, the yet unclear policy stance of the new Federal Reserve Chair, and the ebb and flow of progress in US-Iran negotiations mean all three key variables remain in a signal-blurred stage, making it difficult for the market to form a clear consensus on direction. In the short term, gold prices may remain in a volatile pattern. In terms of strategy, investors are advised to continue lowering their gold price expectations for the first half of the year, maintain a buy-the-dip allocation approach, but keep positions light, waiting for clarity on Walsh's stance and the outcome of the US-Iran negotiations before adjusting positions accordingly.

Source: Everbright Futures Research Institute

Written by: Yao Tao

Professional Qualification: F3082336

Trading Consulting Qualification: Z0018553

Editor: Zhu Henan