Gold’s multi-dimensional appeal—as a hedge against policy failure, geopolitical risk, and fiat debasement—remains firmly intact. Despite intermittent volatility, the underlying structural forces suggest a durable and extended bull market.

Gold: Can we go $4000?

Gold maintains a structurally bullish outlook, underpinned by a convergence of macroeconomic risks, heightened geopolitical tensions, and robust long-term demand from both institutional and sovereign entities. Despite recent price softness and subdued speculative activity—evident in the sharp drop in managed money net long positions in futures markets—physical demand remains exceptionally strong. This is particularly visible in China, where gold ETFs recorded record daily inflows of nearly ¥3 billion (approximately US$410 million) amid escalating global trade tensions. Such flows highlight a growing preference for gold as a strategic hedge against policy uncertainty and market instability.

At the macro level, expectations of looser monetary policy are gathering momentum. Market pricing for US rate cuts has widened, with projections increasing from 40 basis points to as much as 80 basis points over the medium term. This reflects deteriorating US economic data and rising risks to growth, all while inflation remains sticky. The US central bank continues to adopt a cautious, wait-and-see stance, facing a delicate balancing act between inflation control and supporting an economy under pressure from renewed tariff threats and fragile global demand.

Safe-haven demand is also being reinforced by intensifying geopolitical tensions, including a broader realignment of global trade policies and financial systems. As major economies reassess their exposure to dollar-denominated assets, gold is increasingly viewed as a neutral reserve alternative. Central bank purchases remain structurally elevated, and strategic fund flows into gold continue to grow, supporting the metal's long-term valuation. Even with a relatively strong US dollar and occasional broad market sell-offs, gold has historically demonstrated resilience, often rebounding as capital reallocates toward safety and liquidity.

While short-term corrections remain possible—particularly following the recent sharp rally—any downside is likely to be shallow and temporary. Strategic investors continue to accumulate on dips, supported by strong physical demand, rising ETF holdings, and long-term concerns over sovereign debt sustainability and fiscal credibility in developed economies. Gold’s role as both a “fear hedge” in times of crisis and a “wealth preservation” tool in the face of monetary debasement makes it uniquely positioned to benefit in the current macro environment.

Gold 4H

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