"The resilience of gold above $4,800 per ounce at this stage reflects a delicate and complex balance between traditional supporting factors and emerging pressures-one that cannot be superficially interpreted or reduced to the movement of the dollar alone. It is true that the U.S. dollar's retreat from its recent peaks, after failing to sustain its recovery momentum from a four-year low, provided gold with a short-term breather and attracted some buyers."
"Markets have become highly sensitive to any signals from the Federal Reserve, and in this context, I view Kevin Warsh's nomination for the Fed chair as a negative balancing factor for gold over the medium term. Warsh's well-known hawkish stance on inflation sends a clear message that U.S. monetary policy may not ease easily, even if some indicators show temporary slowdowns. In my view, this scenario is enough to restrain any sharp upward move in gold unless a genuine economic or financial shock occurs."
"At the same time, gold has staged a strong recovery from $4,400, its lowest level since early January, indicating genuine investor demand at dips rather than purely short-term speculation. However, I interpret this behaviour as investors repositioning after the steep correction from the all-time high near $5,600, rather than the beginning of a fully-fledged new bullish wave. In my view, the market remains in a "bottom-testing" phase, with investors seeking confirmation that the corrective decline has truly ended."
Gold remains above $4,800 per ounce due to a nuanced interplay of traditional supports and new pressures, rather than a decisive market driver. The recent dollar retreat offered only temporary relief, not a sustained weakness, leaving support fragile. Sensitivity to Federal Reserve signals and the hawkish implications of Kevin Warsh's Fed chair nomination are restraining medium-term upside for gold absent a genuine economic or financial shock. The recent recovery from $4,400 shows investor demand at dips, interpreted as repositioning after a steep correction from the $5,600 high. The market appears to be in a bottom-testing phase as investors seek confirmation the decline has ended.
Read at London Business News | Londonlovesbusiness.com
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