London Gold falls: "Golden Pit" or "Bottomless Pit"? Barclays casts a crucial vote

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Source: Jin Investment Network

Today is Friday (March 27), during the Asian trading session, the latest price of London gold is 985.34 yuan/gram, an increase of 11.71 yuan compared to the previous trading day, with a rise of 1.18%, showing a slow upward trend within the day. After a pullback of about 15% from its high, market divergence has emerged: Barclays was the first to voice that the current price level has the value of “buying on dips”; however, some analysts warn that due to high interest rates and tightening liquidity, the safe-haven function of gold has not truly returned. In the context of intense long-short battles, the debate around “whether this is a suitable time to bottom fish” is becoming a new focus in the market.

【News Flash】

Barclays strategist Ajay Rajadhyaksha pointed out in a recent report that the recent pullback in gold provides investors with a very attractive entry point. He believes that short-term market volatility is obscuring the long-term core logic supporting gold prices, and that the current price level has the value of “buying on dips,” advising investors to reassess their allocation window.

Rajadhyaksha enumerated four major pillars supporting gold’s medium- to long-term performance: First, the global central bank gold buying spree has been ongoing since 2022 without reversal; second, high fiscal deficits in the West exert long-term pressure on the monetary system; third, persistent inflation issues, with the Federal Reserve having missed targets for four consecutive years and a very low probability of interest rate hikes in 2026; finally, geopolitical conflicts and energy shocks have reinforced gold’s irreplaceability as a tail hedge tool in portfolios.

Although the long-term narrative remains appealing, gold’s recent performance is clearly under pressure. After hitting a historical high of $5608 in February 2026, gold prices plummeted sharply, falling about 15% over the past 30 days, briefly breaking below the $4400 mark. This rapid pullback has forced the market to reevaluate gold’s short-term trading value and risk-reward ratio.

IV. Failure of Safe Haven: The Double Squeeze of Interest Rates and Liquidity

The most unusual aspect of this round of decline is that gold has lost its safe haven appeal amid rising geopolitical risks. Sevens Report Research points out that the main reason is that surging oil prices have driven up inflation expectations, making it unlikely for the Federal Reserve to cut rates in the short term; the high interest rate environment has suppressed the attractiveness of non-yielding assets; simultaneously, pressure on global stock markets has triggered a liquidity crisis, forcing institutions to sell profitable assets (such as gold) to cover margin gaps. Under the dominant logic of “interest rates + liquidity,” traditional safe-haven demand has temporarily failed.

【Latest Analysis of London Gold Market】

Yesterday, gold encountered resistance around the 4544 level and subsequently retreated, with the daily trend showing an overall downward oscillation; during the early hours, it dipped to around 4350, ultimately closing the day with a bearish candle. According to regular operating rhythms, today’s gold price is likely to have further downward space, and the core strategy should focus on short positions during rebounds.

From a daily perspective, resistance is key around 4470; once the price touches this area, it can be shorted. If the market continues to show weakness, it is likely to start a downward trend near the early morning rebound point of 4421.

As for support, first pay attention to the early session low of 4378; if this level is effectively broken, the target will further look down to the 4350 level; if the market effectively breaks below 4350, it will likely dip further to around 4292, at which point touching this area could consider establishing long positions.

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Editor: Zhu Henan