--- title: "After the Gold Pullback, What Is the Market Actually Trading?" type: "News" locale: "en" url: "https://longbridge.com/en/news/289172045.md" description: "Jiang Shu, Chief Analyst at Shanghai Xirang Industrial, pointed out that the US-Iran conflict has subjected gold to a medium-term correction supported by fundamentals. The market is re-trading the \"oil price-inflation-Fed\" logic, with the Federal Reserve regaining pricing power. Central bank gold purchases determine the long-term price pivot rather than short-term fluctuations. The gold bull market has not ended and is expected to rise with volatility; the silver bull market continues. In the medium term, this is bullish for the US dollar and bearish for gold; in the long term, it is bullish for gold" datetime: "2026-06-09T10:15:14.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289172045.md) - [en](https://longbridge.com/en/news/289172045.md) - [zh-HK](https://longbridge.com/zh-HK/news/289172045.md) --- # After the Gold Pullback, What Is the Market Actually Trading? The gold market has been undergoing continuous adjustments recently, with diverging views on the subsequent trend of gold prices growing wider. Has the logic behind gold's rise changed? How will central bank gold purchases, Federal Reserve policies, and the US-Iran conflict affect the gold market in the second half of the year? At the Wall Street Jianwen "Big Shot Living Room" event on June 8, Jiang Shu, Chief Analyst in the Gold Circle at Shanghai Xirang Industrial, systematically shared insights on the allocation logic for gold, silver, and US dollar assets. Replay of the live broadcast → Does Gold Still Have Allocation Value? > **Quick Look at Core Views:** > > 1. The US-Iran conflict has changed the nature of this round of gold correction: Gold prices are currently facing a medium-term correction supported by fundamentals, rather than a purely technical adjustment. > > 2. The market is re-trading the logical chain of "Oil Price → Inflation → Fed," with the Federal Reserve regaining its voice in gold pricing. > > 3. Central bank gold purchases determine the long-term price center of gravity for gold, not the price fluctuations in the coming months. > > 4. The gold bull market has not ended, but the future trend is more likely to be a volatile upward movement rather than replicating last year's unilateral surge. > > 5. The silver bull market is still continuing, but investors can understand silver using either the "gold and silver are inseparable" framework or the "copper and silver are inseparable" framework. > > 6. Medium-term: Bullish for the US dollar, bearish for gold; Long-term: Bullish for gold. > ## I. The Russia-Ukraine Conflict Was "Adding Fuel to the Fire," While the US-Iran Conflict Was a "Bolt from the Blue." **Host: Since the US-Iran conflict, why has the performance of gold prices been relatively flat?** **Jiang Shu:** Many investors feel that after the outbreak of the US-Iran conflict, gold, as a safe-haven asset, should have continued to rise. However, the relationship between gold and oil prices is not as simple as people imagine. During the buildup period and the initial outbreak of the conflict, gold and oil prices did rise in tandem because the market was trading on risk-aversion sentiment. Both the Russia-Ukraine conflict in 2022 and the current US-Iran conflict exhibited similar characteristics. However, entering the second stage, the market's focus shifts from risk aversion to inflation and monetary policy. At this point, rising oil prices push up market concerns about inflation, and rising inflation expectations affect the market's judgment on the Federal Reserve's monetary policy. Therefore, gold and oil prices often show an inverse relationship: when oil prices rise, the market worries about delayed rate cuts, putting pressure on gold prices; when oil prices fall, expectations for rate cuts improve, supporting gold prices instead. There is another important difference between this round of the US-Iran conflict and the Russia-Ukraine conflict in 2022. Before the Russia-Ukraine conflict broke out, US inflation and oil prices were already on an upward trend, so the Russia-Ukraine conflict was more like "adding fuel to the fire." In contrast, before the US-Iran conflict broke out, US inflation was not high, and oil prices were relatively low, so its impact on inflation and monetary policy expectations was more like a "bolt from the blue." Originally, the market believed that the correction in gold prices after the significant rise in the first quarter of this year was mostly a technical adjustment. But the US-Iran conflict changed this logic. The inflationary pressure brought by rising oil prices caused the market to reassess the Fed's rate cut path, turning this correction from a short-term technical pullback into a medium-term correction supported by fundamentals. Therefore, the current weak performance of gold prices is not entirely due to problems with gold itself, but because the market has started to trade the new logical chain of "**Oil Price → Inflation → Fed**." In other words, after the outbreak of the US-Iran conflict, the market's previously firm expectations for rate cuts began to waver. Gold is facing not just a technical adjustment, but a medium-term correction influenced by both inflation and monetary policy expectations. ## II. The Federal Reserve Is Regaining Its Voice in Gold Pricing **Host: Will oil prices, inflation, and Fed policy become the most important variables affecting the gold trend in the second half of the year?** **Jiang Shu:** The gold market in 2025 has two very distinct characteristics. First, traditional pricing factors have been significantly marginalized. In the past, the market was accustomed to explaining gold trends using the US dollar, real US dollar interest rates, and Fed policy. However, **of the more than 65% increase in international gold prices in 2025, the part directly related to the Federal Reserve may be only 10%-15%**. Trump 2.0, reciprocal tariffs, the US government shutdown, the Greenland incident, and geopolitical conflicts were the core forces driving the significant rise in gold prices. Second, the slope of the gold price increase far exceeded market expectations. In fact, by the end of 2024, mainstream institutions were almost unanimously bullish on gold, so the continued rise in gold was not surprising. What truly exceeded expectations was the magnitude and speed of the increase. The market underestimated the impact of Trump 2.0 on global financial markets. But entering 2026, the situation began to change. Last year, the impact of good or bad US economic data on gold prices was not obvious; this year, the market has started to pay attention again to US economic data, inflation, and Fed policy. Stronger US economic data and weakened rate cut expectations often directly trigger phased corrections in gold. An important reason is that the US-Iran conflict has changed the market's judgment on inflation. As oil prices remain at high levels, the market has started to worry about inflationary pressures again, thereby refocusing on the Fed's future policy path. Therefore, the main theme of the gold market in the second half of the year has changed. **Before the outbreak of the US-Iran conflict, the market was mostly trading on "Trump 2.0"; now, gold pricing is gradually returning to a stage where "Trump 2.0 and the Fed are equally important.** In other words, **the Federal Reserve is regaining its voice in gold pricing.** This means that future gold trends may exhibit two characteristics: **First, volatility will increase significantly.** Gold may return to a operating mode similar to 2023, with the market fluctuating repeatedly with changes in economic data, inflation, and rate cut expectations, rather than the unilateral upward trend seen in 2025. **Second, the slope of the increase may slow down.** It is difficult to reproduce the rapid and large-scale rally of last year; gold is more likely to play out subsequent trends through volatile upward movements. For investors, in addition to continuing to focus on Trump's policies in the second half of the year, it is even more worthwhile to closely monitor US economic data, Federal Reserve interest rate meetings, and changes in the future monetary policy path. ## III. Central Bank Gold Purchases Determine the Price Center, Not Short-Term Fluctuations **Host: The People's Bank of China has increased its gold holdings for 19 consecutive months, but there are also views that the pace of global central bank gold purchases is slowing down. At what stage do you think central bank gold purchases currently stand? If they slow down in the future, will it put pressure on gold prices?** **Jiang Shu:** Central bank gold purchases are not a new phenomenon that has appeared only in the past two years. In fact, around 2010, global central banks had already shifted from "net sellers of gold" to "net buyers of gold." It was not until 2024, when gold and the US dollar, along with real US dollar interest rates, experienced a phased simultaneous rise, causing traditional analysis frameworks to fail, that the market began to pay more attention to the impact of central bank gold purchases on gold prices. But in my view, **central bank gold purchases are more suitable for explaining the long-term value of gold rather than predicting short-term gold trends.** **Central bank gold purchases, excessive issuance of local currencies, and changes in the influence of the US dollar in the international monetary system jointly determine the continuous rise of the gold price center.** The price center of the previous gold bull market was around $1,000-$1,500, while this round has risen to the $4,000-$5,000 range, all of which is related to the continuous increase in gold holdings by central banks. However, using central bank gold purchases to predict gold price trends in the coming months has inherent flaws. First, central bank gold purchase data itself is lagging. The market often sees data from the previous month, and it is difficult for investors to predict in advance the pace of accumulation by various countries' central banks in the coming months. Second, central bank gold purchases and gold prices do not necessarily move in sync in the short term. Even if gold prices undergo a phased adjustment, central banks may continue to increase their gold holdings. For example, after the Russia-Ukraine conflict in 2022, international gold prices experienced a correction of nearly 20%, but during the same period, global central bank gold purchases were actually accelerating. Therefore, **central bank gold purchases are more like a long-term bullish factor rather than a short-term trading indicator.** It can explain why, after experiencing a bear market, the price center of the next bull market for gold is always higher than the previous one; it can also explain why many long-term gold holders ultimately achieve good returns. But for judging the rise and fall of gold prices in the coming months, US economic data, the Fed's policy path, and changes in inflation are often more worthy of attention than central bank gold purchases. ## IV. "Gold and Silver Are Inseparable" or "Copper and Silver Are Inseparable"? **Host: What is your view on silver? Will it follow the trend of gold in the future, or will there be independent investment opportunities?** **Jiang Shu:** Research on silver naturally has two lines of thought. **The first is "gold and silver are inseparable."** Under this framework, silver is regarded as part of precious metals, with gold always being the core object of study. If the gold bull market continues, the silver bull market continues; if the gold bull market ends, the silver bull market will also end. Historical data shows that the long-term trends of gold and silver have been highly consistent since 1973, so "gold and silver are inseparable" still holds true today. **The second is "copper and silver are inseparable."** Since silver has much stronger industrial attributes than gold, many investors include silver in the industrial metal framework, analyzing it from the perspectives of new energy, photovoltaics, computing power, and industrial demand. The significant fluctuations in silver prices in recent years can indeed be explained by changes in industrial demand. Interestingly, **neither of these two frameworks has been falsified by the market for a long time.** Silver can be explained by gold, and it can also be explained by copper. Therefore, for investors, it is more important to choose the analysis framework they are familiar with. If you are better at macroeconomics and precious metals, understand it according to "gold and silver are inseparable"; if you are more familiar with the non-ferrous metal industry chain, analyze it according to the "copper and silver are inseparable" approach. From the current perspective, I still tend to believe that the major trend of gold has not ended. **Against the backdrop of the continuing gold bull market, the silver bull market is also still continuing.** Although silver has recently experienced a significant correction, leading some investors to recall the history of silver peaking before gold in 2011, the macroeconomic environments of the two periods are not the same. 2011 corresponded to the recovery cycle after the financial crisis, while the environment facing the global economy today is significantly different from that time. Therefore, merely comparing price patterns to 2011 is insufficient. Before the long-term trend of gold ends, I believe silver will continue to follow gold. ## V. Look at the US Dollar for the Next 6 Months, Look at Gold After 6 Months **Host: If you could only choose among assets such as gold, the US dollar, and US stocks in the next 6-12 months, how would you rank them? Is gold still the top choice?** **Jiang Shu:** **If the time frame is limited to the next 6 months, I would not prioritize allocating to gold.** The reason is simple. There is still considerable uncertainty in oil prices, and from a year-on-year perspective, US inflationary pressure is unlikely to dissipate quickly in the short term. Although this inflationary pressure is not enough to push the Fed to raise interest rates again, it is enough to keep pushing back expectations for rate cuts. In this context, the US dollar is phasically strong, and gold is more likely to be in a phase of volatility or even correction. For ordinary investors, whether allocating to Gold ETFs or physical gold, they need to be prepared to withstand phased floating losses. Therefore, **if looking only at the next 6 months, I would prioritize US dollar assets and simultaneously underweight gold.** But **if extending the time horizon to more than 6 months, my view on gold becomes significantly more optimistic.** One possibility is that the US economy eventually experiences a significant downturn or even a crisis. In the short term, this will impact most risk assets; but from historical experience, crises are often followed by more aggressive rate cuts and liquidity easing, which is precisely the most favorable environment for gold. Another possibility is that the US successfully enters a new economic cycle driven by AI, maintaining strong economic resilience. In this case, although the US-Iran conflict will delay the start of rate cuts, it will also lengthen the entire rate cut cycle. In the long run, this is also conducive to the continuation of the gold bull market. Therefore, regardless of which scenario ultimately unfolds, I believe the long-term gold bull market has not ended. The essence of the impact of the US-Iran conflict on gold is: **Medium-term: Bullish for the US dollar, bearish for gold; Long-term: Bullish for gold.** In the near future, gold may still experience adjustments. But as inflationary pressures gradually ease and the market starts to re-trade rate cut expectations, gold is still expected to hit new highs after the adjustment ends. For investors, a more reasonable strategy might not be to significantly increase gold allocations right now, but to gradually increase the proportion of gold assets in the portfolio during future corrections. Risk Warning: The Master Class is a platform selecting compliant third-party professionals to teach investment research theory courses. The content taught does not constitute buying or selling recommendations for any specific products. The opinions expressed in the platform's courses are for learning and reference only, do not represent the opinions or views of Wall Street Jianwen, and do not address users' special investment goals, financial situations, or needs. The market is volatile and uncertain, and the platform assumes no responsibility for any losses you suffer from relying on course views or information. Investment involves risks; please make decisions cautiously. ### Related Stocks - [UUP.US](https://longbridge.com/en/quote/UUP.US.md) - [SLVR.UK](https://longbridge.com/en/quote/SLVR.UK.md) - [518850.CN](https://longbridge.com/en/quote/518850.CN.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [UGL.US](https://longbridge.com/en/quote/UGL.US.md) - [GOLD.AU](https://longbridge.com/en/quote/GOLD.AU.md) - [SIVR.US](https://longbridge.com/en/quote/SIVR.US.md) - [USDU.US](https://longbridge.com/en/quote/USDU.US.md) - [GLDM.US](https://longbridge.com/en/quote/GLDM.US.md) - [PSLV.US](https://longbridge.com/en/quote/PSLV.US.md) - [IAU.US](https://longbridge.com/en/quote/IAU.US.md) - [ZSL.US](https://longbridge.com/en/quote/ZSL.US.md) - [SGOL.US](https://longbridge.com/en/quote/SGOL.US.md) - [SLV.US](https://longbridge.com/en/quote/SLV.US.md) - [AGQ.US](https://longbridge.com/en/quote/AGQ.US.md) ## Related News & Research - [Comex gold settles 1.75% lower at $4260.00](https://longbridge.com/en/news/289228195.md) - [Gold’s near-term outlook remains bearish, chart shows](https://longbridge.com/en/news/289117638.md) - [Comex gold settles 0.03% lower at $4335.90](https://longbridge.com/en/news/289089036.md) - [Gold & Silver: From Pullback To Perfect Setup](https://longbridge.com/en/news/289208644.md) - [Gold just had its worst selloff since March. A floor may be $4,000, says one veteran strategist](https://longbridge.com/en/news/289045818.md)