Gold Review: Liquidity risk remains, gold slightly weakens

On March 11, COMEX gold fluctuated lower but with limited range, closing at $5,183.9 per ounce, down 1.11%. Domestic SHFE gold night trading opened lower and fluctuated, closing at ¥1,151.48 per gram, down 0.37%. The US February CPI increased by 2.4% year-on-year, matching expectations and the previous value; February core CPI growth remained at 2.5%, the slowest in nearly five years. Inflation data slowed as expected, but energy costs rose due to US-Iran conflicts, failing to ease market concerns. It is widely expected that the Federal Reserve will keep interest rates unchanged in March, but the number of rate cuts this year has begun to fluctuate. On the same day, US Treasury yields rose across the board by 5 to 8 basis points, with the long end particularly weak. The 30-year yield has increased about 10 basis points this week, and the 10-year yield rose 6.8 basis points, up over 30 basis points since the Iran conflict. Under the pressure of a stronger dollar, spot gold prices fell to a weekly low.

In terms of geopolitical developments, Trump stated that military actions against Iran are “about to end,” while Iran warned that the US could face a prolonged attrition war. Iran proposed three essential conditions to end the war, demanding US and Israel compensation. The US-Iran conflict remains uncertain, and geopolitical volatility will continue to be a key factor in short-term trading. Recently, gold has shown a certain negative correlation with oil and the US dollar, and a positive correlation with US stocks, indicating concerns about liquidity in the gold market. Due to geopolitical volatility, short-term strategies still prioritize rhythm over directional choices. (Everbright Futures)