Gold has been pulled in two directions in recent weeks. On one side, rising oil prices and escalating geopolitical tensions have strengthened the metal’s safe-haven appeal.

Tuesday, 28/04/2026 | 17:51 GMT+8 by Damian Chmiel Gold falls 3% to $4,620/oz on Tuesday, April 28, 2026, testing three-week lows as Fed hawkish hold lifts dollar and Treasury yields. XAU chart shows $4,300 as the bull-bear line and a weekly close below targets $3,400 on a 100% Fibonacci extension, a 26% drop. JPMorgan still targets $6,300 by year-end and Goldman Sachs holds $5,400, calling the March correction a positioning unwind. Gold traded at $4,620 per ounce on Tuesday, April 28, 2026, falling for a second straight session and testing three-week lows as a hawkish Federal Reserve hold lifted the dollar and pushed Treasury yields back toward 4.4%. The metal has now lost close to 3% on the week, rejected the upper boundary of the multi-month consolidation defined by the January 28 record close at $5,400, and slipped back below the 50-day EMA. With the FOMC decision Wednesday, U.S. Q1 GDP later in the week, and the Strait of Hormuz still partially closed, why is gold falling has become the most-asked question in the precious metals complex. Follow me on X for real-time market analysis: @ChmielDk . Why Gold Price Is Going Down Today? Dollar, Yields, Hawkish Fed Hold The pullback is more about real yields than tail risk. The dollar index has held above 98.5, ten-year Treasury yields are running between 4.3% and 4.4%, and the CME FedWatch tool puts the probability of an unchanged rate at Wednesday's FOMC meeting at 99.5%. Each of those signals raises the opportunity cost of holding a non-yielding asset. Bas Kooijman, CEO and Asset Manager of DHF Capital S.A., framed the macro tape this way: "Gold fell to multi-week lows on Tuesday, pressured by a firm US dollar and rising Treasury yields." How High Can Gold Go? UBP Rebuilds Bullion Positions and Reaffirms $6,000 Gold Price Prediction for 2026 Why Gold Is Surging With Silver and Why Experts Predict $7,000 Price in 2026 Why Gold Is Going Up? Goldman Gold Price Prediction Sees $5,400 as XAU Rebounds Kooijman added that prolonged disruptions in the Strait of Hormuz are pushing energy prices higher, reinforcing inflation concerns and feeding back into yields, with gold-backed ETFs flipping to outflows last week after three weeks of inflows. Linh Tran, Market Analyst at XS.com, sees a controlled distribution rather than a panic flush: "After reaching a peak near 4,900 USD/oz, gold has entered a relatively deep corrective phase, pulling back toward the 4,700 area. However, this decline has not been characterized by panic selling, but rather by a controlled sequence of losses." Tran's read fits the daily chart, where lower closes have been measured rather than capitulatory. The structural drivers pulling gold lower this week: Dollar index above 98.5, sustained for the third straight session Ten-year Treasury yields back at 4.3-4.4%, lifting real yields CME FedWatch pricing 99.5% probability of an unchanged FOMC at 3.50-3.75% Gold ETF flows turned negative last week after three weeks of inflows Strait of Hormuz disruption keeping oil bid and the rate-cut path further out ETF Outflows and the Strait of Hormuz Premium The flow picture has shifted decisively in the past week. Last week's ETF outflows, the first since early April, broke a three-week inflow streak. The reversal coincided with West Texas Intermediate climbing back above $100 per barrel and 25 commercial vessels being redirected away from Iranian ports over the weekend. That oil-yields feedback loop has now become gold's dominant short-term driver. Higher oil keeps inflation expectations elevated; elevated inflation expectations keep the Fed on hold; a Fed on hold keeps real yields elevated; elevated real yields keep gold under pressure even as the geopolitical backdrop, in classical terms, should support it. As I wrote in my March crash analysis , the same paradox crushed gold roughly 15% in March 2026. Key flow and physical market data points entering the FOMC week: Spot XAU/USD trades roughly 18% below the $5,595 January 29 all-time high Western ETF outflows resumed last week, snapping a three-week inflow streak WTI crude back above $100 per barrel on Strait of Hormuz disruption Central bank buying still running near 60 tonnes per month, per Goldman Sachs Gold Technical Analysis: The $4,300 Bull-Bear Line My chart shows the same picture that has defined gold since late January: a wide consolidation channel between $5,400 at the top and the $4,300 to $4,400 zone at the bottom. The upper bound is the January 28 record close, retested without breaking on March 2. The lower bound is fixed by two anchors, the October 2025 highs at around $4,360 and the panic lows from the week of March 23-27, where price briefly tagged the 200-day EMA at $4,200. In 15 years on the precious metals beat at FinanceMagnates.com, documented across my analyst page , I have watched gold violate multi-month consolidation channels twice, both times with the kind of momentum visible on this week's chart. Tuesday's session moved decisively away from the 50-day EMA, which now sits as resistance overhead, and the rejection at the channel top is the cleanest sell signal the daily chart has produced since my March 25 reversal call at the 200 EMA played out. A breakout up from this range opens price discovery and a run at fresh all-time highs above $5,600. A breakout down is what concerns me. Below $4,300, my Fibonacci extension based on the full 2024-2026 trend projects 100% extension at $3,400, which lines up almost exactly with the April 2025 highs that capped price for four straight months before the September acceleration. From the current $4,620 level, that scenario implies a 26% drop, in line with the bearish framework I detailed in my previous analysis . Gold price technical analysis. Source: Tradingview.com Until $4,300 breaks on a weekly close, this is consolidation, not a confirmed downtrend. Below $4,300, my chart has very little technical support before $3,400. Level Type Notes $5,400 Resistance / Channel top January 28 record close, retested March 2 $4,800 Resistance / 50-day EMA Lost on this week's break $4,620 Current spot Tuesday, April 28, 2026 $4,360 Support / October 2025 highs Lower bound of multi-month range $4,200 Support / 200-day EMA Tested briefly during March 23 panic $3,400 Extension target April 2025 highs and 100% Fibo extension Gold Price Predictions 2026: How Low Can Gold Go? The institutional band remains wide and stays bullish even after the spring drawdown. JPMorgan Global Research holds a $6,300 year-end 2026 target, with strategist Greg Shearer projecting average quarterly investor and central bank demand of around 585 tonnes; my reading is that the call needs another credible Fed pivot to play out before year-end. Goldman Sachs sticks with $5,400, framing the March selloff as a leveraged-positioning unwind rather than a fundamental break, and on the chart that view aligns with the consolidation thesis as long as $4,300 holds. UBS sees $5,200 by June and $5,900 by late 2026, but its short-term cut explicitly cited stronger dollar and oil pressure, which is the exact tape gold is trading right now. Wells Fargo at $6,100 to $6,300 and Deutsche Bank at $6,000 round out the bullish institutional cluster, all anchored on the same fiscal-debasement and central-bank-buying thesis that the FinanceMagnates.com report on UBP rebuilding bullion positions detailed earlier this month. The Reuters poll of 30 analysts has settled at a $4,746 median for 2026, almost on top of current spot, suggesting the consensus has already absorbed the bearish leg. The same complex dynamic is playing out across the silver leg of the precious metals trade , where every move in gold is being amplified. Source Target Notes JPMorgan $6,300 Year-end 2026, 585 tonnes/quarter demand assumption UBS (long) $5,900 Late 2026 target, $5,200 short-term by June Wells Fargo $6,100-6,300 Raised from $4,500-$4,700 in February 2026 Deutsche Bank $6,000 Reiterated by Michael Hsueh, Head of Metals Research Goldman Sachs $5,400 Year-end, base case excludes new buyer wave Reuters poll $4,746 Median of 30 analysts for 2026 My TA (bear) $3,400 Activated only on weekly close below $4,300 FAQ, Gold Price Analysis Why is gold falling today? Gold is falling on April 28, 2026, because the U.S. dollar index is above 98.5, ten-year Treasury yields are at 4.3% to 4.4%, and CME FedWatch shows a 99.5% probability the Federal Reserve holds rates at 3.50% to 3.75% on Wednesday. Higher real yields raise the opportunity cost of a non-yielding asset, and last week's ETF outflows reinforced the move. How low can gold go in 2026? Based on my technical analysis, gold's bull-bear line is $4,300. A weekly close below activates a 100% Fibonacci extension at $3,400, anchored by the April 2025 highs that capped price for four straight months. That implies a 26% drop from current levels. Above $4,300, the metal stays inside its multi-month consolidation rather than a confirmed downtrend. Will gold crash below $4,000? A close below $4,300 on the weekly chart is the trigger I am watching for a sustained move under $4,000. The 200-day EMA sits at $4,200, briefly tagged during the March 23 panic. Without that level breaking on closing basis, talk of a crash is premature. Above $4,300, the structural bull thesis from JPMorgan and Goldman Sachs remains intact. What is the 200-day EMA on gold? The 200-day EMA on gold sits at approximately $4,200 per ounce as of April 28, 2026. The level was last tested during the panic session of March 23, when intraday price briefly touched the average before reversing higher. The 200 EMA has acted as the definitive bull-bear boundary for gold since the metal first cleared $4,000 in October 2025. Should I buy gold now? This article is not investment advice. From a chart perspective, gold trades inside a wide consolidation between $4,300 support and $5,400 resistance. Risk-managed entries become clearer only after the FOMC decision and the response at $4,300. JPMorgan targets $6,300 and Goldman Sachs targets $5,400 for year-end 2026, while my chart's bear scenario warns of $3,400 if support breaks. Source： https://www.financemagnates.com/trending/why-is-gold-falling-gold-price-risk-crash-to-3400/

Wells Fargo Securities' bull-case forecast for gold suggests that after last month's pullback in gold prices, gold prices could surge remarkably to $8,000 per ounce . Before the US-Iran war broke out on February 28 this year, gold had been one of the hottest market momentum plays of the year. However, after the war began, gold prices declined. In March, gold futures prices fell nearly 11%, marking the largest single-month decline since June 2013. But the Wall Street investment bank expects the "debasement trade" — in which central banks around the world sell fiat currencies such as the US dollar in favor of more neutral safe-haven assets — could push the precious metal to new heights. Wells Fargo Securities' chief equity strategist Ohsung Kwon wrote: "We are in the fourth currency debasement cycle, which started in 2022." Kwon added: "After the recent pullback in gold prices, prices are now closer to our model's fair value of $4,500 per ounce. Looking at the three drivers, all of them suggest that currency debasement will deepen further from current levels." The strategist said that four out of five economic scenarios point to further currency debasement, and gold prices could rise to $8,000 per ounce by 2027 as a result . Spot gold and gold futures were last trading near $4,800 per ounce, implying more than 66% upside room . Conversely, Kwon's bear-case forecast shows gold prices falling to $4,000 per ounce by the end of 2027, a decline of about 17% from current levels. Kwon uses the M2/gold ratio — M2 money supply divided by the gold price per ounce — to identify the current cycle. The analyst said the ratio shows that the latest debasement cycle began in 2022, when Russia launched its military operation against Ukraine and the US entered a rate-hiking cycle, prompting central banks worldwide to ramp up gold purchases. Previous currency debasement cycles for gold occurred during: the Great Depression; the "Nixon Shock" — when then-President Richard Nixon ended the convertibility of the US dollar into gold — and the subsequent stagflation era; the War on Terror in the early 2000s; and the subprime mortgage crisis. Kwon added that currency debasement cycles last an average of 8.5 years, and the current cycle, at 3.5 years in, has not yet reached its halfway point.

Gold has lost significant ground in recent weeks, but for Wells Fargo, this apparently changes little in the long-term picture. The US bank has reaffirmed its positive outlook for the precious metal and significantly raised its price target for the current year.

Gold is doing the opposite of what it should. The metal is falling for a reason most investors did not see coming. Wall Street's biggest banks have not changed their outlook. Here is why that matters.

According to Wells Fargo's mid-2025 outlook report, precious metals will continue to benefit from geopolitical conflicts and economic uncertainties, with gold prices expected to hit a record high of $3,600 per ounce in 2026. Analysts noted in the report that the significant correction in commodity prices presents attractive opportunities later this year and into 2026. Additionally, they anticipate that improvements in the US economic conditions later in 2025 will drive growth in commodity demand. Wells Fargo recommends that investors pivot to sectors that may benefit from an improving macro environment, such as energy or precious metals, and adjust their portfolios to hedge against policy and geopolitical uncertainties. Exercise patience Wells Fargo emphasized in the report that rapid changes in economic policies over the past few months have disrupted investors and capital markets. Since the 2024 US elections, uncertainty surrounding US economic policies has continued to escalate, primarily due to tariff volatility, with recent uncertainties surpassing those during the COVID-19 pandemic. Analysts highlighted that these uncertainties are expected to continue driving gold prices higher over the next two years, as private investors and global central banks will continue to purchase gold. By 2026, central banks alone are expected to account for 21% of global gold demand. Meanwhile, US short-term interest rates are expected to decline in 2026, and the US dollar is also expected to rebound mildly, which will further strengthen the upward trend in precious metal prices. However, analysts also caution that investor optimism about precious metals' rise has reached levels historically preceding significant corrections, leading them to prefer exercising patience and waiting for price dips before buying. The bank expects gold prices to pull back slightly to a range of $3,000 to $3,200 by the end of this year, with the outlook for gold prices rising to $3,600 per ounce by the end of 2026. Analysts also recommend that investors focus on quality factors rather than speculative assets and diversify their portfolios through commodities like precious metals, which may outperform broader market indices. Chantelle Schieven, Managing Director of Capitalight Research, also believes that due to the resilience of the US economy and labour market, gold prices may stagnate throughout the summer but will oscillate near high levels. However, considering the inflationary impact of tariffs, she expects the US to face stagflation risks over the next two years, which will support gold prices.

At 20:30 Beijing time on Wednesday, the US Bureau of Labor Statistics will release the May Consumer Price Index (CPI) report. People will closely monitor these data to see if US President Trump's tariffs are beginning to impact consumer prices. Chicago Fed President Austan Goolsbee has warned that April's inflation report may represent the last calm before tariffs lead to a rise in inflation. The median forecast from economists indicates that the overall US CPI for May is expected to maintain a MoM growth rate of 0.2%, with the YoY growth rate rising from the four-year low of 2.3% touched last month to 2.5%. For the core CPI, which excludes the more volatile food and energy categories, the MoM growth rate is expected to increase from 0.2% in April to 0.3%, while the YoY growth rate is projected to rise from 2.8% to 2.9%, reversing the downward trend seen so far this year. Forecasters suggest that core inflation in the US may rebound in May, reflecting the mild impact of tariffs being passed on to major imported goods, while prices for some services, such as airfares, are expected to narrow their gains or fall outright. Samuel Tombs and Oliver Allen, economists at Pantheon Macroeconomics, noted in a report: "Only a handful of goods prices are likely to rise in May due to new tariffs—June will be different—while some non-essential service providers may cut or maintain low prices to support demand." Rising Goods Inflation, Weakening Service Prices Economists have been closely watching how tariff costs will be passed on to consumers. As of April, the CPI report showed minimal impact, as firms absorbed some of the costs and relied on inventories purchased before the tax increases. However, companies, including Walmart, have indicated they will begin raising prices for some goods. Bank of America economists Stephen Juneau and Jeseo Park stated in a report that the impact of tariffs on May's data should be broader than in April. The most obvious sign of tariff-driven price increases in April was the 8.8% MoM surge in audio equipment prices. Other notable categories include heavily taxed goods such as clothing, new cars, and household appliances. Wells Fargo economists Sarah House and Nicole Cervi pointed out: "Inventory accumulation ahead of the tax increases and expectations of potential reductions in the current tariff scale have so far curbed cost increases. However, as high tariffs persist, it may become more challenging to shield consumers from cost shocks." On the other hand, forecasters have pointed out that disinflation in the services category may have curbed the overall CPI increase . Andrew Schneider of BNP Paribas said that airfare and hotel prices have remained sluggish in recent months, and deflation is expected in both categories in May. In his report, he noted that the decline in foreign tourists may have contributed to the price weakness. Anna Wong, a strategist at Bloomberg Economics, believes that the price drops in some service categories reflect consumers cutting back on non-essential spending. She also expects airfares to decline. "Both consumers and government departments are cutting back on travel spending this year, and airfares continued to deflate in May," Wong wrote in her report. How many more months will the US Fed have to wait? Economists and US Fed officials have differing views on when the impact of tariffs on inflation will fully materialize. Goldman Sachs expects tariffs to push up commodity prices and overall inflation in the coming months, but this increase will be one-off, after which prices will return to normal. In the May CPI data, the institution expects the impact to be relatively small, with core inflation projected to rise 0.05% to 0.25% MoM. Looking ahead, Goldman Sachs expects core inflation to reach 3.5%, up from 2.8% in April, but with easing pressures in the labour market, housing, and automotive sectors. The institution also expects hotel and airfare prices to remain flat in the short term, with most inflation coming from goods rather than services. Other perspectives suggest that companies may not raise prices until surplus inventories are digested. Due to the inventory surplus before April, it may take several more months to digest inventories. According to information as of May 23, the US Fed's latest Beige Book shows that companies planning to pass on tariff-related costs expect to achieve this goal within three months . Debates on the inflation outlook have also taken place within the US Fed. Minneapolis Fed President Neel Kashkari said that the Federal Open Market Committee (FOMC) had a useful debate on whether to view price-related increases through the lens of tariffs, and he found the argument against ignoring the impact of tariffs on inflation more compelling. Several others, including US Fed Governor Adriana Kugler, seem to agree with this view. Kugler noted that the impact of tariffs on prices may be more persistent. Atlanta Fed President Raphael Bostic has said he is particularly concerned about inflation and the public's expectations for future price increases, believing that "it will take three to six months to see how things unfold."Goolsbee, however, expressed some "trepidation" about the claim that tariffs would have a temporary impact on inflation. On the other side of the argument was Fed Governor Waller, who believed that tariffs would lead to a one-time increase in prices and stated that it was standard practice for central banks to overlook one-time price hikes. Fed Chairman Powell and his colleagues have indicated that there is time to assess the impact of trade policies on the economy, inflation, and the job market. The market widely expects the Fed to keep interest rates unchanged at its meeting next week. The recent strong non-farm payrolls report has already led traders to lower their expectations for a Fed interest rate cut. The money market expects the Fed to cut interest rates by 45 basis points before the end of the year, suggesting that only one rate cut by the Fed this year is fully priced in, with an 80% probability of a second cut. The latest Reuters Fed survey showed that 59 out of 105 analysts believe the Fed will resume interest rate cuts next quarter, possibly in September, and 60% of analysts think the Fed will cut interest rates at least twice, but this is only a slim majority. In the absence of guidance from the Fed, analysts' expectations are also widely dispersed. Fed officials have generally urged a wait-and-see approach, avoiding providing any specific guidance on the path of interest rate cuts. San Francisco Fed President Daly has previously stated that two rate cuts this year still seem reasonable, while Bostic still expects only one rate cut. However, both have warned that this largely depends on how the economy develops. Market Reaction A few hours after the release of the CPI data, the US Treasury will hold two crucial Treasury auctions. It will sell $39 billion in 10-year Treasury notes in the early hours of Thursday and $22 billion in 30-year Treasury notes in the early hours of Friday. These results could have a significant impact on the direction of the economy, the Fed's response, and its interest rate policy stance. Coupled with the comprehensive tax and spending bill currently under consideration in Congress, volatility in the US Treasury market is set to intensify. This week's Treasury auction results will be closely watched, although economists and investors generally believe there will be no major surprises. Chip Hughey, head of fixed income at Truist Advisory Services, said, "If you look at the current yield levels relative to global peers, US Treasuries still offer a relatively attractive advantage... I expect demand to be quite strong, especially for the 10-year note auction." The US dollar index, which typically fluctuates with US Treasury yields, rebounded in the first half of May before pulling back to consolidate above the three-year low near the 98 mark. The counter-trend rebound has alleviated the oversold condition of the US dollar index's 14-day Relative Strength Index (RSI) , potentially laying the groundwork for the next round of declines, especially if inflation falls short of expectations. Technically speaking, the lows around 98 represent the most significant support level to watch , while the nearest clear overhead resistance comes from the downtrend line near 99.50 . Even if a hotter-than-expected inflation report triggers a rebound in the US dollar index, bears may look to sell into strength, joining the ongoing downtrend at more favorable prices. For gold, the current technical setup favors the bulls. If gold prices strengthen further and break through the immediate resistance level of $3,352-3,353 , it will reaffirm the bullish outlook and advance towards the intermediate resistance level of $3,377-3,378, thereby challenging the round-number resistance at $3,400. On the other hand, a pullback in gold below the $3,323-3,322 area may continue to attract some buyers and find decent support around $3,300 . If subsequent selling intensifies, gold prices may subsequently break below the $3,288-3,287 area, shifting market bias in favor of the bears and dragging prices down to the monthly swing low near $3,245, with this corrective decline potentially extending even further to near $3,200. In the current environment, tariff headlines and any potential trade agreements (especially between the US and China) may have a greater impact on the market than this month's inflation report , making it crucial to monitor developments in these areas as well.

More and more Wall Street investment banks have recently reiterated their forecasts that the US dollar will weaken further due to interest rate cuts, a slowdown in economic growth, and the trade and tax policies of US President Trump. Morgan Stanley has stated that the dollar will fall to its lowest level during the COVID-19 pandemic by the middle of next year; JPMorgan Chase is similarly bearish on the dollar; Goldman Sachs has indicated that if tariff measures are blocked, Washington's efforts to seek alternative sources of revenue could have an even more negative impact on the dollar. "We believe that a medium-term narrative around dollar depreciation is taking shape," said Aroop Chatterjee, a strategist at Wells Fargo in New York. On Monday, amid escalating global trade tensions, the dollar fell against all G10 currencies once again. Currently, the ICE US Dollar Index has accumulated an 8.9% decline year-to-date. According to Dow Jones Market Data, this represents the worst performance for the index in the first five months of the year on record. The Traditional Carry Trade Logic Has Been Upended It is worth noting that one of the most striking aspects of the dollar's continued weakness this year is the near disappearance of the traditional carry trade logic in the foreign exchange market. Due to President Trump's erratic policies, investor interest in US assets has cooled, and the traditional close relationship between US Treasury yields and the dollar has broken down. In the past, the movement of long-term US Treasury yields, which measure government borrowing costs, tended to move in tandem with the dollar exchange rate, with higher yields typically indicating a strong economy and attracting foreign capital inflows. However, since Trump announced his "Liberation Day" tariffs in early April this year, the 10-year US Treasury yield has risen from 4.16% to 4.42%, yet the dollar has declined by 4.7% against a basket of currencies. Last month, the correlation between the dollar exchange rate and US Treasury yields fell to its lowest level in nearly three years. Shahab Jalinoos, head of G10 FX strategy at UBS Group, said, "Under normal circumstances, a rise in US Treasury yields indicates a strong US economy. This is attractive for capital inflows into the US." However, he also noted that "if yields rise due to higher US debt risks, fiscal concerns, and policy uncertainty, then the dollar will weaken simultaneously. This pattern is actually quite common in emerging markets." And currently, the situation facing the dollar is undoubtedly the latter. Trump's aggressive push for the "Big Beautiful Bill" could exacerbate the US budget deficit, coupled with Moody's recent downgrade of the US sovereign credit rating, has made investors more concerned about the sustainability of the deficit and has placed severe pressure on US Treasury prices. Analysis by Torsten Sløk, chief economist at Apollo, shows that the credit default swap (CDS) spreads of the US government—a trading level reflecting the cost of hedging against loan default risks—are now similar to those of Greece and Italy. These two countries were once the "epicenters" of the European debt crisis. Trump's attacks on Fed Chairman Jerome Powell have also unsettled the market. He met with Powell last week and told the Fed Chairman that it was a mistake not to have implemented an interest rate cut so far this year. The US dollar has significant downside room. Michael de Pass, global head of interest rate trading at Citadel Securities, said, "In the past, the strength of the US dollar was partly derived from the integrity of its institutions: the rule of law, the independence of the central bank, and the predictability of policies. These factors made the US dollar a reserve currency." But he added, "In the past three months, these have all become issues. A major concern in the market currently is that the institutional credibility of the US dollar is being eroded." The divergence between US Treasury yields and the US dollar indicates that the market's traditional carry trade pattern has changed significantly in recent years—when expectations about the direction of monetary policy and economic growth were key drivers of government borrowing costs and exchange rate movements. Andreas Koenig, global head of foreign exchange at Allianz Global Investors, said that the new pattern may increase the risks faced by investors seeking safe-haven assets. He said, "This changes everything. In the past few years, holding long positions in the US dollar in a portfolio had been a very good stabilizing factor. When the US dollar was a stabilizing factor, you had a stable portfolio. But if the US dollar suddenly becomes correlated with other asset classes, that increases risk." Open interest data from the US Commodity Futures Trading Commission shows that market participants' bearish sentiment toward the US dollar is still far from extreme levels, underscoring that the US dollar may still face significant downward pressure in the future. JPMorgan strategists led by Meera Chandan strengthened their negative view on the US dollar last week, instead recommending bets on the Japanese yen, euro, and Australian dollar. Morgan Stanley also listed the euro, yen, and Swiss franc as the biggest winners from a US dollar decline. Skylar Montgomery Koning, currency strategist at Barclays, said that the US dollar's headwinds may come from further weakness in the bond market, an escalation of trade wars, and weak US data. Paresh Upadhyaya, head of foreign exchange strategy and portfolio manager at Amundi Pioneer Asset Management, expects that the Bloomberg Dollar Index will depreciate by another 10% over the next 12 months. "Capital Tax" Adds Insult to Injury For Goldman Sachs, another major risk that could further exacerbate the outlook for the US dollar is Trump's potential "next move" against foreign enterprises and investors—namely, the "Section 899" of the "Grand Beautiful Bill" mentioned by many market participants last week. As Caixin reported last week, this section would allow the US to impose additional taxes on enterprises and investors from countries deemed to have punitive tax policies. In other words, if a country is identified by the US Treasury Department as engaging in "unfair taxation," entities from that country—including enterprises, residents, and even overseas controlled companies held by these individuals or enterprises—may face higher tax rates on their investments and business activities within the US. Goldman Sachs strategists, including Kamakshya Trivedi and Michael Cahill, wrote in a report that even though the scope of application of this tool is relatively narrow, at a time when investors are already viewing the shift in cross-asset correlations as a reason to avoid US assets and seek greater diversification, such tools will still exacerbate investors' concerns about US investment risks. In another report, Goldman Sachs strategists stated that their models indicate the US dollar is overvalued by about 15%, suggesting there is further downside room. They added that this decline could be driven by the reallocation and repricing of global assets. Goldman Sachs strategists believe that investors should prepare for a weaker US dollar—especially depreciation against the euro, yen, and Swiss franc, which have all appreciated in recent months. They also pointed out that these new risks provide a strong rationale for allocating some funds to gold. Matthew Hornbach, global head of macro strategy at Morgan Stanley, also said in a media interview on Monday, " Investors outside the US are reevaluating their exposure to the US —both in terms of asset holdings and the currency risk exposure associated with these asset holdings. They have increased their hedging ratios, which is one of the factors contributing to downward pressure on the US dollar over the next 12 months." The bank forecasts that the US dollar index will fall by about 9%, reaching 91 by this time next year. Shahab Jalinoos, a strategist at UBS, pointed out, "The greater the policy uncertainty, the more likely investors are to increase their hedging ratios. If hedging ratios increase based on the existing stock of US dollar assets, this could lead to billions of dollars in selling." "

As trade conflicts between the US and the UK, as well as China, have eased somewhat, Wall Street investors' concerns about Trump's tariffs have diminished recently, with US stocks rising for five consecutive days last week and approaching record highs again. However, just as one wave subsides, another arises. This week, a new obstacle has emerged for US stock investors—this time, it's not about tariffs, but about the US debt outlook. Moody's Downgrades US Credit Rating On Friday evening last week, US Eastern Time, Moody's Investors Service announced that it had downgraded the US government's top credit rating from Aaa to Aa1, blaming successive US presidents and members of Congress for the ballooning budget deficit. Moody's stated that there are few signs of the US budget deficit shrinking. As a result, on Monday morning this week, medium and long-term US Treasuries, US stock index futures, and the US dollar all fell, reflecting investors' growing concerns about the US economic outlook. Currently, the US Congress is discussing more unfunded tax cuts. However, since US President Trump took office, he has been wielding the "tariff stick" indiscriminately and attempting to overturn the long-standing commercial partnerships the US has established with European countries and Canada, making the US economic outlook appear increasingly bleak. On Monday this week, the yield on 10-year US Treasuries, after climbing at the end of last Friday, remained largely around 4.5%, reaching 4.515% as of press time, up 7.6 basis points. The yield on 30-year Treasuries rose by 10 basis points, pushing it above 5% to its highest level since November 2023 and close to its historical peak in mid-2007. As of press time, the S&P 500 futures were down 1.08%, and the Nasdaq 100 futures were down 1.35%. US Asset Attractiveness May Weaken Max Gokhman, Deputy Chief Investment Officer at Franklin Templeton Investment Solutions, said, "Given the accelerating pace of unfunded fiscal relief measures, it's not surprising that the US Treasury rating has been downgraded." "(The US') debt servicing costs will continue to climb as major investors (including sovereign and institutional investors) gradually shift from US Treasuries to other safe-haven assets... Unfortunately, this could trigger a steeper bearish spiral in US Treasury yields, exert further downward pressure on the US dollar, and reduce the attractiveness of the US stock market." In an earlier report, Wells Fargo strategists Michael Schumacher and Angelo Manolatos told clients that they expected "10-year and 30-year US Treasury yields to rise by an additional 5-10 basis points due to Moody's downgrade." Although a rise in government bond yields typically boosts a country's currency, for the current US, market concerns about US debt may exacerbate doubts about the US dollar. Currently, the US dollar index has seen a slight decline in the morning session, currently standing at 100.85, down 0.24%. Meanwhile, media data shows that the sentiment among options traders has reached its most pessimistic level in five years. In a report to clients, Subadra Rajappa, a strategist at Société Générale, wrote, "Higher long-term bond yields will increase the (US) government's net interest costs and deficit... In the long run, the erosion of the safe-haven status of US Treasuries will affect the US dollar and foreign demand for US Treasuries and other US assets."

Last night and this morning, as several US Fed officials publicly discussed interest rate cuts, the negative impact of Trump temporarily took a backseat, and the three major US stock indices collectively rose for the third consecutive trading day. At the close, the S&P 500 Index rose 2.03% to 5,484.77 points; the Nasdaq Composite Index rose 2.74% to 17,166.04 points; and the Dow Jones Industrial Average rose 1.23% to 40,093.4 points. (S&P 500 Index daily chart, source: TradingView) US Fed Governor Christopher Waller stated, if aggressive tariff levels harm the job market, he would support an interest rate cut. Cleveland Fed President Hamack also publicly stated that if clear evidence of economic direction is obtained, the earliest possible rate action could be taken in June. According to public port data, the number of ships arriving at the main ports in Southern California, which handle trade between the US and Asia, will be halved from early May. Based on shipping data extrapolating logistics and the broader economy, the market infers that the US economy is currently at the tipping point of a storm. Therefore, analysts from UBS and JPMorgan also stated on Thursday, faced with significant economic weakness, the US Fed indeed has the willingness and ability to take action. The risk of economic slowdown will also weigh on the prospects of this round of rebound in US stocks. Goldman Sachs' capital flow team noted in a report this week, although the stock market has finally found some breathing room, this does not mean that the pressures disrupting the market have disappeared. They analogized: "Just like the 26-degree weather in New York in April, we are not in a hurry to jump into the pool." Several analysts also pointed out that the S&P's 5,500 points remain a key resistance level to watch. Piper Sandler's chief market technical analyst, Craig Johnson, noted, unless the bulls break through the 5,500 level, preferably accompanied by an increase in trading volume, the market may continue to oscillate and consolidate. However, once it successfully breaks through 5,500 points, we are likely to see another wave of gains to 5,800 points. Hot Stock Performance Tech giants continued to lead the market higher. Apple rose 1.84%, Microsoft rose 3.45%, Amazon rose 3.29%, Nvidia rose 3.62%, Google-A rose 2.53%, Tesla rose 3.5%, Meta rose 2.48%, AMD rose 4.51%, and Intel rose 4.37%. At the close, the Nasdaq Golden Dragon China Index rose 0.68%, marking its fourth consecutive day of gains. Alibaba rose 0.27%, JD.com fell 3.25%, Baidu rose 2.27%, Pinduoduo rose 2.83%, Bilibili rose 2.49%, NIO rose 6.36%, NetEase rose 2.12%, Futu Holdings rose 6.35%, EHang Intelligent rose 3.27%, Canadian Solar rose 18.07%, and Pony.ai, which released its latest autonomous driving system, rose 39.41%. Company News [After-Hours Earnings Snapshot] Google's parent company Alphabet's Q1 earnings significantly exceeded market expectations. Revenue was $90.23 billion, up 12% YoY, estimated at $89.1 billion; earnings per share were $2.81, compared to $1.89 in the same period last year, estimated at $2.01; operating profit was $30.61 billion, up 20% YoY, estimated at $28.86 billion. The board authorized the company to repurchase up to $70 billion of Class A and C shares, while increasing the dividend by 5% to $0.21 per share. As of press time, Alphabet's Class A and C shares both rose more than 4% after hours. Intel's Q1 revenue was $12.67 billion, down 0.4% YoY, estimated at $12.31 billion; adjusted earnings per share were $0.13, compared to $0.18 in the same period last year, estimated at $0.01; the issue is, the company expects Q2 revenue to be between $11.2 billion and $12.4 billion, well below the market estimate of $12.88 billion. At the same time, Intel lowered its total capital expenditure target for 2025 from $20 billion to $18 billion. As of press time, Intel fell more than 4% after hours. [Amazon and Nvidia Executives Unite: AI Data Center Construction Heat Shows No Signs of Slowing] On Thursday (April 24), at a conference hosted by the Ham US Energy Research Institute, Kevin Miller, Vice President of Global Data Centers at Amazon AWS, said, "There has been almost no significant change, and we continue to see very strong demand." Earlier this week, Wells Fargo analysts cited industry sources as saying that AWS is suspending some data center lease contracts. [Apple's AI Head Loses Power Again, Mysterious Robotics Team Transferred to Hardware Head] According to informed sources, Apple plans to transfer the robotics team from the AI department led by John Giannandrea to the hardware engineering department later this month, to be taken over by John Ternus, Senior Vice President of Hardware Engineering. This is the second major project to be stripped from the AI team in nearly a month. Previously, due to poor development progress, the Siri project had been removed from its jurisdiction. [Meta Confirms Virtual Reality Business Layoffs] A Meta spokesperson confirmed to the media on Thursday that Reality Labs, responsible for developing virtual reality, augmented reality, and related wearable devices, is undergoing layoffs, affecting the Oculus Studios software development team in the department.