【TMGM Financial Recap】Fed Meeting Minutes About To Be Released, Gold Long-Bear Stalemate About To Be Broken!

Gold prices rose 0.57% on Tuesday, supported by a pause in U.S. Treasury yield gains and a weaker dollar. The yield on the U.S. 10-year Treasury note rose to a more than 20-year high on Monday before retreating slightly, and the dollar retreated from its one-year high, making dollar-denominated gold cheaper for investors holding other currencies.

The core driver behind gold's rise on Tuesday was the return of safe-haven demand. In parts of the Eurozone, especially France, government debt continues to rise and budget deficits widen, leaving investors uneasy and driving sovereign bond yields higher. This safe-haven logic reverses last week's suppressive logic, when previous French fiscal shocks pushed US Treasury yields higher, supported the dollar, and weighed on gold; Now, concerns triggered by French debt turmoil are beginning to translate into safe-haven demand for gold, while the pause in US Treasury yield gains provides double support for gold prices.

Investors are taking a breather, waiting for the next major catalyst, possibly the PPI or CPI. Yields are already high, and before rising further, the market needs more compelling reasons to push Treasury prices down. This assessment means that if yields stall at high levels, gold's suppressive force will weaken, opening up room for a rebound.

The minutes of the Federal Reserve's September FOMC meeting will be released on Thursday Beijing time, which may help determine the direction of future monetary policy. If the minutes lean dovish, it may confirm a dovish market repricing and provide support for gold; If it leans hawkish, it could reignite expectations of rate hikes and weigh on gold prices.

TD Securities stated that continued buying by exchange-traded funds and demand from autonomous decision-making investors continue to support gold, maintaining its view that gold prices will break above $5,000 per ounce in 2027. This forecast is based on the long-term logic of continued ETF buying and demand from autonomous decision-making investors, contrasting with the current short-term pressured pattern. Additionally, Middle Eastern crude oil exports remain resilient, and the G7's emergency release of reserves has eased supply concerns and pushed oil prices lower, which to some extent eases inflation concerns and poses a complex indirect impact on gold.

Market Insight:

The core drivers of the current gold rally are the return of safe-haven demand and the decline in the dollar and US Treasury yields. Volatility in the French Treasury market and concerns over US Treasuries have driven safe-haven funds into gold, while the 10-year Treasury yield has fallen from its 24-year high and the dollar has weakened from a one-year high, providing double support for gold prices.