The decline in gold prices has triggered bargain hunting, with related ETF trading volumes significantly increasing, reflecting investors' portfolio adjustments amid changing interest rate expectations and geopolitical risks.
Due to the market's delayed expectations of interest rate cuts, gold prices are under short-term pressure. In the Taiwan market, the Yuanyuan S&P Gold Leverage 2x and Yuanyuan S&P Gold contracts fell by 5.4% and 2.7%, respectively, but their trading volumes more than doubled compared to the average level over the past week.
Analysts point out that maintaining high-interest rates diminishes gold's appeal as a non-interest-bearing asset, while increased liquidity demand also poses pressure on precious metals.
Despite short-term volatility intensifying, the market remains optimistic about long-term demand for gold, with central bank gold purchases and safe-haven demand seen as key supporting factors.
