RadexMarkets Radex: Interest rate logic dominates, long-term value awaits release

On March 25th, the current gold market is at a crossroads of bullish and bearish battles. Although geopolitical safe-haven demand remains strong, concerns about inflation and the resonance of a strong dollar are significantly suppressing investor sentiment. RadexMarkets believes that, in the short term, gold price fluctuations depend more on the macro policy stance rather than purely on the situation’s development. Against the backdrop of interest rate battles, gold’s high sensitivity to real yields makes it still struggle during external conflict escalations. This misalignment in fundamentals is precisely the focus of the current market contest.

From the specific transmission mechanism, the trend of crude oil prices has become a key variable influencing gold prices. RadexMarkets states that the surge in oil prices driven by Middle East conflicts has risen approximately 60%, directly increasing the difficulty for the Federal Reserve’s policy shift. Industry models estimate that for every 10% increase in crude oil prices, inflation could rise by 0.2 percentage points. If high energy costs cause inflation to become entrenched, central banks will inevitably extend the high-interest-rate cycle. Under this logic, rising bond yields and a strong rebound in the dollar will continue to pressure non-yielding assets like gold, even triggering cross-market sell-offs by leveraged investors to replenish liquidity.

This short-term pain does not change gold’s strategic position as a long-term safe haven. RadexMarkets believes that once energy prices fall back into a reasonable range of $90 to $95 and inflation pressures ease, central banks returning to easing policies will open a new upward channel for gold prices. As real interest rates potentially decline and the dollar enters a weakening cycle, the so-called “currency devaluation trade” logic will re-emerge. Looking ahead to the 2026 market, gold prices are expected to reach the $5,000 mark in the second quarter. Although there may be technical pullbacks by year-end, the overall upward shift of the price center is an inevitable trend.