ChainThink report, March 20: Generally, geopolitical conflicts tend to heighten market risk aversion, driving up gold prices. For example, following the outbreak of the Russia-Ukraine conflict in February 2022, gold prices surged rapidly within half a month. However, since the escalation of the Israel-U.S. conflict, crude oil and the U.S. dollar have soared significantly, while gold has experienced consecutive declines.

Nicolas Qu, Senior Deputy Director of the Research & Development Department at Orient Golden Credit, stated that ongoing warfare in the Middle East is pushing up oil prices and reinforcing global inflation expectations, which may strengthen the Federal Reserve’s stance on maintaining interest rates unchanged—weighing on precious metals. Adrian Ash, analyst at BullionVault, said: “The timing for future central bank rate cuts will be further delayed. From a technical standpoint, this is bearish for gold.” Daniel Galvin, commodities strategist at TD Securities, commented: “In the short term, we still see downside risks in the market. Gold has considerable room to fall, yet it can still maintain support levels established during its bull phase.” Daniel Pavilonis from commodity broker RJO noted that if the current conflict persists, both equities and precious metals will continue to decline, with gold potentially falling back to $4,200 per ounce.

Nicholas Flappler, Global Institutional Markets Head at ABC Refinery, observed that gold has held key technical support levels on the weekly chart, suggesting a potential rebound toward around $4,800 per ounce—a level previously breached. Carsten Mönk, Head of Research at Julius Baer, emphasized that gold can only truly rally if financial markets exhibit more pronounced safe-haven demand amid escalating tensions in the Middle East.

China International Securities notes that the medium-term trajectory of gold prices following past Middle East conflicts remains contingent on U.S. dollar credibility and liquidity factors. Looking ahead, the continuation of loose liquidity and weakening U.S. dollar credibility is expected to further drive gold prices higher. The firm maintains a bullish outlook on gold-related equities as gold sets new highs. Previously, Bank of America projected gold could rise to $6,000 per ounce within the next 12 months. UBS forecasts the international spot gold price could reach $6,200 per ounce over the coming months.