$XAU Gold prices have sharply adjusted by a thousand points: Is it a bubble burst, or is the 'gold pit' reappearing?

Recently, gold has rapidly retreated more than $1000 from its high, and such drastic fluctuations undoubtedly make the market uneasy. However, this round of selling is not due to a collapse in fundamentals but is more like a 'de-bubbling' process triggered by position adjustments and forced liquidations. Traditional driving factors such as bond yields and the dollar can only explain about $200 of the decline, which means that the rest of the drop is more about liquidity selling under market pressure—this pattern of 'selling gold to replenish positions' during volatility is historically not uncommon.

Currently, the market may be overestimating the likelihood of aggressive rate hikes. Faced with inflation primarily driven by supply-side factors, policymakers may be more inclined to watch and wait rather than aggressively tighten at the cost of growth, and this macro environment will ultimately support gold prices. Meanwhile, geopolitical risks often initially cause gold prices to fall before rising, and as uncertainty continues, its safe-haven value will again become prominent.

Therefore, this adjustment is creating a highly attractive entry point. Strong fundamentals mean that gold prices currently appear 'cheap,' making this a long-awaited opportunity for those on the sidelines. Basic models indicate that gold prices are expected to aim for $5020 by the end of the year, while upward risks may push it to reach the $6000 level.

From a broader asset allocation perspective, commodities are entering a favorable cycle. It is recommended to allocate 15%-20% of traditional portfolios to commodities, with about 20% of that directed towards precious metals. The current deep adjustment in gold may be a strategic layout window that investors should not miss.