Energy Inflation Lock, Lifted, but the “Ceasefire Illusion” Quickly Shattered

The most core change in this round of market action is: in the first half of the geopolitical conflict, gold is simultaneously subjected to dual pressure from “energy inflation” and “rate-hike expectations.” COMEX gold plunged 10.9% in March, marking the first single-month decline of more than 10% since 2013. After the ceasefire news, the oil-price crash eased concerns about inflation. The market’s rate-cut expectations quickly flipped from “betting on rate hikes” to a probability of about 65% for at least one rate cut before the end of the year. The US Dollar Index weakened, and the gold suppression factors reversed rapidly.

In the short term, the ceasefire protocol is highly fragile. First Finance and Economics reported that analysts believe the current rebound is more of a “decompression-driven rebound,” and that negotiations still face multiple obstacles. Whether the Strait of Hormuz will reopen is a key variable. If the ceasefire breaks down and oil prices surge again, gold may repeat the “inflation-rate hike” suppression logic from the first half, and may even face a new round of selloffs.

A review by Guohai Securities notes that the relationship among war developments, oil prices, and gold is not a straight line. Whether gold can break out into a trend-based long bull market depends on whether oil prices truly lift the inflation center and how central banks respond:

· Scenario 1: Oil prices fall back to around 90 US dollars, but do not fully return to pre-conflict levels → Gold is more likely to maintain a high level with broad, range-bound volatility;
· Scenario 2: Ceasefire is implemented + the US economy weakens + the Federal Reserve releases rate-cut signals → Gold is expected to switch to a macro-style easing bull market similar to the period after 2003;
· Scenario 3: Talks break down, the strait remains blocked long term, and oil prices form a new center above 120 US dollars → Gold’s eventual upside space is, in theory, the largest, but in the first half it will still be suppressed first by tighter liquidity and high real interest rates.

In the medium to long term, the reshaping of the global political and economic order, the de-dollarization process, and central banks’ continued gold purchases remain the core support. The trend of shifting upward of the precious metals price center remains unchanged.