Golden script big reversal? With the double buff of the US and Iran + the Federal Reserve fully stacked, how should we play it?
Last Friday, gold staged a "deep V rebound," soaring from an intraday low of 4655 directly to 4960, a single-day surge of nearly 6.7%. Silver also rose over 6%, and even US stocks joined the excitement. On the surface, it seems like a return of bulls, but in essence, it resembles a concentrated repair of the previous extreme decline, with panic emotions temporarily retreating, which does not mean that risks have been eliminated.
What truly needs attention is the emotional disturbances that may arise from the second round of negotiations between the US and Iran over the weekend, as well as the ongoing game of expectations regarding Federal Reserve policy.
In the current market, position is more important than opinion.
From the market perspective, gold prices are still operating within a key range:
Support: 4935-4897, 4880, 4750, 4620
Once it breaks below 4897-4880 and retests, we need to be wary of a rapid drop to 4750 or even 4620;
Resistance: 5000, 5085, 5100, 5170, 5290
Only if it effectively stabilizes above 5100 can it extend towards 5190 and 5240.
Regarding central banks continuously increasing their gold holdings, the market tends to overinterpret. In fact, central bank gold purchases are more about long-term allocation behavior rather than short-term price signals. Continuous small increases over several months are more about optimizing reserve structures and diversifying risks, and do not equate to "supporting" gold prices or "lifting" them. Historical data also indicates that the correlation between central bank gold buying and short-term gold price fluctuations is not strong.
What truly affects gold volatility remains liquidity.
If we compare Federal Reserve policy to a water pool: raising and lowering interest rates simply adjusts the speed of water flow, while expanding and contracting the balance sheet determines the size of the pool.
What the market is genuinely worried about is not whether interest rates will be lowered, but that while there is an expectation of rate cuts, the pool is slowly getting smaller—meaning liquidity is being withdrawn.
In this context, even if a rebound occurs in the short term, it resembles a link in a fluctuation rather than the starting point of a one-sided market.
It has been emphasized that the two core cards for the US are finance and public opinion. Through expectation management, policy rhythm, and adjustments in market structure, guiding the flow of funds is far less costly and more efficient than direct confrontation.
In summary, the medium to long-term logic of gold has not been undermined, but short-term volatility has significantly intensified. In this phase, what is more needed is to control the rhythm and respect the position, rather than being led by emotions.
$XAU
