ProShares: Still view gold as a strategic allocation; short-term price trends may remain volatile.

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Source: Zhitong Finance

As the macro environment shifts and the gold market experiences volatility again, Matt Bance, strategist and portfolio manager at Placer, states that from an investment perspective, gold is still viewed as a strategic allocation. The structural demand from central banks, coupled with unclear policy prospects, provides certain support for gold prices, even though short-term price movements may remain volatile.

Placer pointed out that after the attack in Iran, gold prices showed a typical safe-haven surge, but the rally could not be sustained as the market quickly reinterpreted the nature of the event. Investors did not view it as a persistent geopolitical shock; instead, they tended to see it as an inflation event driven by energy prices. This shift pushed up real interest rates, strengthened the dollar, and weakened market expectations for interest rate cuts, all of which are unfavorable for gold prices.

At the same time, market positioning also plays a role. Gold prices had already accumulated significant gains before the event, limiting the space for new safe-haven capital inflows. Conversely, investors took profits due to market fluctuations and reduced holdings in assets that had performed strongly earlier.

Looking ahead, gold price movements will continue to be influenced by both macroeconomic and geopolitical factors. In the short term, the direction of real interest rates and central bank policy expectations will be critical, while attention must also be paid to energy prices and the dollar’s performance. If energy shocks persist or worsen, it may push the market into a stagflation environment, which historically has been relatively favorable for gold prices.

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Editor: Zhu Henan