Everbright Futures 0910 Gold Commentary: Gold Rebounds as Oil Prices Break $100 and US Dollar Weakens

On September 9, COMEX gold saw a slight rebound, closing at $4,447.2 per ounce, up 0.18%. The domestic SHFE gold night session plunged before recovering slowly, closing at 956.04 yuan per gram, up 0.62%.

The key drivers halting the price decline were the synergy between a weakening US dollar and capital inflows into ETFs. On Wednesday, the US Dollar Index extended its weakness, hitting a low of 98.62 and closing at 98.71, down 0.15%. Meanwhile, on the 9th, the World Gold Council released a report stating that global gold ETF inflows in August reached $18 billion, the second highest monthly inflow on record, with funds listed in North America and Europe dominating. The weakening US dollar and increased ETF buying provided momentum for the recovery of gold prices after three consecutive days of decline. However, the suppressive force from oil prices breaching the hundred-dollar mark was also real. During the day, Brent crude oil temporarily broke the $100 per barrel threshold, reaching as high as $100.18 per barrel. On the 8th, the US military destroyed five Iranian oil tankers; Iran subsequently carried out retaliatory strikes on US military targets in Jordan. This was the largest series of attacks targeting ships by both sides since the outbreak of war six months ago, and the continuing escalation of tensions in the Middle East drove oil prices sharply higher. Rising oil prices directly strengthen inflation expectations, becoming the most immediate force suppressing gold prices. After the US August Nonfarm Payrolls data exceeded expectations, the market probability for a Federal Reserve rate hike in September has risen to about 60%, and rising interest rate expectations have significantly increased the holding cost of gold.

Looking ahead, the PPI data on Thursday and CPI data on Friday may become core short-term variables influencing the direction of gold prices. If inflation data once again surpass expectations, the probability of a rate hike may further increase and gold prices may retest lower; if inflation pressures ease and the probability of a rate hike diminishes, gold prices may regain support.

Source: Wind, Everbright Futures Research Institute

Author: Shi Yueming

Professional Qualification: F03097365

Trading Advisory Qualification: Z0017563

Editor: Zhu Henan