As a focus of market attention, gold has undergone a months-long correction, leading to differing opinions among investors regarding its future prospects. The Chief Strategist at Aberdeen Group points out that gold's ability to hold firmly above $4,000 per ounce demonstrates the solid foundation of its long-term structural bull market, and the current consolidation range presents a good opportunity for long-term funds to buy on dips.

The $4,000 support level holds firm, and the long-term bullish logic remains unshaken.

Robert Minter, Chief Investment Strategist at Aberdeen Group, stated that the market should not continue to focus on the Federal Reserve's hawkish rhetoric, as the long-term fundamental factors supporting gold remain intact. The ongoing expansion of global government debt, coupled with continued gold purchases by central banks, will continue to provide a floor for gold prices. Minter explicitly stated that $4,000 per ounce is a suitable price level for investors to add to their positions. Despite the recent pullback in gold prices, the core logic driving gold's upward trend remains unchanged. Debt levels in developed economies continue to expand, weakening the purchasing power of their currencies. Central banks in major Asian countries, including Poland, have not stopped increasing their gold reserves despite the price adjustment. While some central banks, such as Turkey, have briefly sold gold to stabilize their exchange rates and address the energy crisis, these are merely short-term emergency measures; the long-term trend of gold purchases has not reversed. This round of gold price fluctuations is mainly due to disturbances in the crude oil market.

Demand resilience is evident, and bullish funds are positioning themselves in the options market.

Beyond central bank gold purchases, investment demand for gold has also demonstrated resilience. Although short-term speculative funds have adjusted their positions, gold ETFs have maintained positive inflows throughout the year, with hedge funds continuing to bet on rising gold prices through the options market. Data from the World Gold Council shows that global gold ETF holdings have declined slightly, but the drop is far from reaching the level of panic selling, and ETF holders have not exited the market on a large scale.

A rational view of the Fed Chair's hawkish remarks

The market generally interpreted Federal Reserve Chairman Kevin Warsh's hawkish remarks as a signal of prolonged high interest rates. Mint cautioned investors against over-interpreting the comments, suggesting that Warsh's hawkish stance was more about bolstering policy credibility while awaiting the completion of the assessment by the Fed's newly established policy task force. Asset price reactions are more relevant than the text of the speech; the weakening dollar after the announcement indirectly supports the bullish logic for gold.

With the influence of interest rates weakening, a significant interest rate hike is a low-probability event.

In his view, interest rates have less influence on gold pricing than before, and the Federal Reserve's room for rate hikes has reached a ceiling. Even if rate hikes begin, a typical 25 basis point adjustment is unlikely to change the overall trend of capital flows. Only extreme sharp rate hikes and soaring oil prices would suppress gold prices, and the probability of either scenario is relatively low. Looking at the long term, developed economies still lack effective ways to solve their increasingly heavy debt burden. As long as the two major trends of debt expansion and central bank gold hoarding continue, the consolidation of gold prices around $4,000 is not a risk warning, but rather a good opportunity to establish medium- to long-term long positions. Spot gold daily chart source: FX678. At 9:49 AM Beijing time on August 4th, spot gold was trading at $4058.39 per ounce.