The biggest uncertainty for gold remains Fed monetary policy. The current rally
is predicated on a weaker US economy and the end of the rate-hiking cycle, but inf
remains uncertain. If inf rebounds above expectations, the Fed would likely
sustain higher rates, US Treasury yields would rise and the case for gold could
reverse, risking a rapid pullback. Near-term rapid gains have created
significant profit-taking and technical overbought risk, raising the chance of a
correction. Speculative offshore flows are trading policy moves quickly,
amplifying short-term volatility, while central banks continue to buy dips as a
long-term strategy. The clash between fast speculative flows and steady
central-bank demand makes a sustained one-way move unlikely; expect high-level
choppy trading with a gradually higher base. Retail investors should not blindly
chase highs and should size exposure to risk tolerance with a long-term
allocation perspective.
