Geopolitical situation and economic
prospects jointly promote

The main tone of the gold market this week is
centered on the further development of the
situation in the Middle East and the escalation
of the conflict between Russia and Ukraine. At
the beginning of the week, as Hamas and Israel
were tense in the Gaza Strip after the peace
talks broke down, Russia deployed non-
strategic nuclear weapons, and the price of
gold was due to its hedging properties.

However, comments from Fed officials tended
to be hawkish, arguing that inflationary
pressures remain too high to consider cutting
interest rates. This may put some pressure or
gold prices, as the weakening expectations of
interest rate cuts will weaken investor demand
for gold. As a result, gold was silent for two days
on Tuesday and Wednesday.

Globally, many major central banks have
expressed a willingness to cut interest rates,
which is a positive factor for gold. Sweden's
Riksbank cut interest rates for the first time
since 2016, and support for rate cuts among
Bank of England officials also increased. The
Swiss National Bank chose to cut interest rates
at its March meeting, while the European
Central Bank is almost certain to cut rates in
June. The Reserve Bank of Australia decided to
Keep interest rates steady at its recent meeting
and made dovish comments. Policy shifts from
these central banks have supported gold as
they have created an environment of falling
interest rates, further increasing the
attractiveness of gold prices.

Israeli armored units and military personnel
once again gathered around the city of Rafah
after two days of silence, causing investors to
turn to gold as a safe-haven asset. Rafah is the
last major urban center in the Gaza Strip not
reduced to rubble, and the collapse of peace
talks has made the situation even more
unstable, further increasing investor demand
for safe-haven assets. On the other hand, the
weakness in the U.S. labor market also drove
gold prices higher. The latest number of people
filing for unemployment benefits in the United
states showed an unexpected rise, increasing
speculation that the Federal Reserve may cut
interest rates early. This data shows that the
U.S. economy is facing difficulties in the current
high interest rate environment, further
stimulating the market to advance
expectations of interest rate cuts.

From a technical perspective, the Golden Week
chart broke through the 4-hour pressure area
and has been trading strongly sideways above
the 4-hour support level. On Thursday, it started
to rise strongly due to the conflict in the
geopolitical situation and the unsatisfactory
initial data for the week. Next week, technical
attention will be paid to the 4-hour support
area below. At the same time, investors will also
need to pay close attention to the upcoming
economic data and speeches from Federal
Reserve officials next week, especially the U.S.
consumer Price Index (CPI) report in May