Gold stages a battle to defend the $5,000 level

The international gold market is at a delicate and critical moment.

The $5,000 per ounce threshold has become a psychological benchmark for global investors to gauge gold’s value. Its gains and losses significantly influence market sentiment and future trends, directly affecting the battle between bulls and bears.

Currently, this key level is facing a severe test. Today, spot gold prices briefly fell below $5,000 per ounce, then hovered around this level with increased volatility, intensifying the tug-of-war between buyers and sellers and making market sentiment more cautious.

Notably, despite ongoing conflicts in the Middle East, the safe-haven demand that should support gold’s strength has not materialized effectively. Instead, an abnormal situation has emerged—what some call the “Defense of $5,000”—prompting investors to reassess gold’s safe-haven properties.

Why does gold, as a “safe harbor” for funds, fall instead of rise?

Although gold is a safe-haven “hard currency,” the current US-Iran conflict has not primarily boosted safe-haven premiums. Instead, it has driven oil prices higher due to supply disruptions and increased global inflation pressures. Rising energy prices—rising inflation expectations—diminished Fed rate cut prospects—strengthening dollar—these chain reactions have directly suppressed gold’s upward momentum.

Specifically, the Middle East situation has disrupted global energy supply, heightening concerns over uncertainties in energy production and transportation, fueling fears of “energy shortages,” and causing significant short-term fluctuations in crude oil and natural gas prices.

Higher energy prices will increase living costs, further fueling inflation fears. Citibank research indicates that, influenced by Middle East tensions, limited aviation fuel supplies have caused prices to surge, likely leading to higher airline ticket prices in 1 to 3 months. In the short term, inflation expectations have risen in tandem with oil prices.

Rising inflation expectations have led markets to expect that the Fed will not cut interest rates soon. Gold, as a non-interest-bearing asset, has a negative correlation with real interest rates: expectations of rate cuts decline, pushing up US Treasury yields, increasing the cost of holding gold, and causing capital to flow out of gold markets, exerting downward pressure on prices.

Recently, the US dollar index has broken through 100, reaching a 10-month high, further attracting capital inflows. Even with safe-haven support from geopolitical tensions, gold prices remain under downward pressure, exhibiting an unusual “safe-haven but not rising” trend.

Additionally, gold prices have already accumulated significant gains, leading to a wave of short-term profit-taking. With the upcoming Federal Reserve meeting, some investors are cautious and choosing to exit or lock in profits, adding further selling pressure and causing gold prices to oscillate downward.

“Super Central Bank Week” Approaching: Watch for Fed Policy Signals

This week, the global market enters a “Super Central Bank Week,” with about 20 countries and regions holding monetary policy meetings. The most anticipated is the Fed’s policy meeting, which will determine the March policy stance and signal the full-year policy outlook.

Currently, the consensus is that the Fed will keep interest rates unchanged. According to CME’s “FedWatch,” the probability of a rate cut in March is only 0.8%, while the chance of holding rates steady is 99.2%.

Amid rising oil prices due to Middle East tensions, expectations for the Fed’s rate cuts this year have shifted. CME FedWatch indicates that the market has delayed the first 25 basis point rate cut from June to December, and the total number of rate cuts for the year has been reduced to one. The higher rate center further reinforces the market’s view of “higher and longer” inflation in the US.

Source: FedWatch, for reference only, not investment advice or promise.

As a “barometer” of global assets, the signals from this Fed meeting could directly influence gold trends. If Powell adopts a hawkish stance on inflation control, further reducing rate cut expectations, gold prices may face continued correction; conversely, if concerns about US economic growth increase and a dovish policy outlook is expressed, gold could rebound strongly.

Is the Bull Market in Gold Over?

Looking back, the end of a precious metals bull market often involves a major reversal in trading logic. For example, after the 2008 liquidity crisis, market expectations shifted from inflation fears to deflation worries; in 2011, the failure of QE expectations after economic recovery; in 2020, the transition from recession to recovery amid pandemic shocks.

Currently, although gold is experiencing short-term volatility and intense battles between bulls and bears, the medium- to long-term upward trend remains intact.

De-dollarization Continues

Global central banks are steadily reducing US debt holdings and increasing physical gold reserves for diversification and safety, providing solid support at the gold price bottom. As of the end of February 2026, China’s central bank has increased gold holdings for the 16th consecutive month. Emerging market central banks, such as Malaysia and South Korea, are also restarting gold accumulation plans. As a non-sovereign credit risk asset, gold remains a core choice for countries to optimize reserves and hedge geopolitical risks.

Geopolitical Normalization

Tensions in Iran, the ongoing Russia-Ukraine conflict, and frequent regional conflicts worldwide persist; US “America First” diplomacy further adds to global policy uncertainties. Trade frictions and geopolitical struggles continue to disturb markets, maintaining long-term safe-haven demand.

Tight Supply and Demand

Global gold reserves can only sustain current mining rates until 2032. Some resource countries are tightening exports, while emerging industries like AI and photovoltaics drive marginal growth in industrial and technological gold demand. Overall, the supply-demand landscape remains tight, reinforcing long-term upward support for gold prices.

In summary, in the short term, gold may fluctuate and consolidate. A clearer signal from Fed policy and changes in geopolitical risks are needed for further stabilization. Until macroeconomic turning points emerge, the structural bull market in gold remains likely.

For investment tools, consider Gold ETF Guotai (518800), which directly tracks gold prices, with each unit representing 1 gram of physical gold. It avoids the hassle of physical gold investment and complex futures, making it suitable as a long-term “stabilizer” for asset allocation and risk hedging. As of March 17, the Guotai Gold ETF (518800) had assets exceeding 46 billion yuan, with an increase of over 17 billion yuan this year, maintaining active trading.

For over-the-counter investors, related Connect Funds (Class A 000218, Class C 004253, Class E 022502), mainly investing in Guotai Gold ETF, offer similar risk-return profiles to gold assets and are also good options for gold investment.

Finally, note that gold is not an all-powerful safe-haven asset and does not guarantee only rising prices. Investors should develop reasonable investment plans based on their risk tolerance, investment horizon, and goals, avoiding blindly chasing gains or panic selling.

Risk Reminder

Data source: Wind, as of 2026/3/17. Fund size fluctuations are for reference only and do not predict future performance or constitute investment advice or promises. Gold prices can rise rapidly in the short term; watch for potential pullbacks. Gold ETF Guotai mainly invests in physical gold contracts, with risk-return similar to gold assets, different from stocks, mixed funds, bonds, or money market funds. Connect funds mainly invest in Guotai Gold ETF, with similar risk-return profiles. For purchasing, adhere to investor suitability regulations, conduct risk assessments in advance, and select funds matching your risk capacity.

Note: The subscription and redemption prices for Guotai Gold ETF contracts are based on physical gold contracts, cash differences, and other considerations. There are no subscription or redemption fees for participants when subscribing or redeeming fund units. Subscription fees for Guotai Gold ETF Connect Class A are based on the amount: less than 1 million yuan at 0.7%; 1–2 million yuan at 0.3%; 2–5 million yuan at 0.1%; over 5 million yuan at a flat 1,000 yuan per transaction. Redemption fees vary by holding period: less than 7 days at 1.5%; 7 days to 1 year at 0.2%; 1–2 years at 0.05%; over 2 years free. For Class C and E, similar tiered fees apply. Refer to fund legal documents for details.