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2026-04-07 09:20:49
[Merrill Lynch Strategist: Gold Under Short-Term Pressure, but Long-Term Structural Support Remains Unchanged] (1) Emily Avioli, Vice President and Investment Strategist at Merrill Lynch, said that high yields, a stronger dollar, and profit-taking have created headwinds for gold in the short term, but all the structural factors that previously drove gold prices well above $5,000/ounce have not disappeared, and the long-term trend for gold remains upward. (2) She pointed out that since the outbreak of the Middle East conflict, gold prices have plummeted by about 16%, moving in the same direction as risk assets, which violates its traditional role as a geopolitical hedging tool. This is mainly related to the position effect, changes in interest rate expectations, and dollar dynamics, rather than changes in fundamentals. After the historic surge, market positions have been overextended, and profit-taking has been amplified by the depletion of institutional cash levels. (3) Rising energy prices have pushed up inflation expectations, delaying interest rate cuts and raising the possibility of interest rate hikes. The increase in real yields has increased the opportunity cost of holding gold. At the same time, the dollar has strengthened due to safe-haven demand, creating headwinds for gold. However, structural forces such as high fiscal deficits, the moderate depreciation trend of the dollar, and the diversification of central bank reserves still exist. Once the uncertainty in the Middle East subsides, these demand drivers should regain their effectiveness, and gold will remain a strategic asset in a balanced portfolio.
