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How to Determine the Bull Market Cycle of Gold

Let's outline the key framework for judging the gold bull market cycle. Currently, gold is in a “high-volatility bull market cycle” intertwined with long-term macro drivers, short-term capital battles, and complex geopolitical situations.

Core Judgment: Triple Resonance

A genuine gold bull market requires macro logic, capital flows, and technical patterns to resonate together.

1. Macro Logic: The Foundation of the Bull Market

Negative/Low Real Interest Rates: This is the most critical engine of the gold bull market. When U.S. Treasury real yields (nominal yield minus inflation expectations) decline or turn negative, the opportunity cost of holding gold is very low, increasing its attractiveness. Bull markets typically start at the end of rate-hiking cycles or the beginning of rate-cutting periods.

Weak Dollar Cycle: Gold is priced in USD. When the dollar weakens due to fiscal deficits, de-dollarization, or Federal Reserve easing policies, gold becomes “cheaper” relative to other currencies, boosting demand.

Systemic Risks and Credit Hedging: Includes geopolitical conflicts (such as the current Middle East situation), financial crises, sovereign credit crises (like debt monetization concerns), etc. At such times, gold’s monetary properties and ultimate safe-haven value become prominent.

2. Capital Flows: The Fuel of the Bull Market

Central Bank Gold Purchases: This has been the most solid buying force in recent years. Long-term, strategic purchases by global central banks (especially emerging markets) to diversify foreign exchange reserves and reduce dependence on the dollar provide a bottom support for gold prices.

Institutional Capital Inflows: The continuous increase in holdings of global gold ETFs (such as SPDR Gold Shares) is an important market indicator. In the futures market (COT reports), high speculative net long positions also indicate positive market sentiment.

Retail Investor Sentiment Overheating: Phenomena like “mothers rushing to buy gold” or retail gold bar shortages often signal late-stage bullish sentiment, which warrants caution against short-term overheating.

3. Technical Patterns: The Path of the Bull Market

Trend Confirmation: Prices should remain stable above key long-term moving averages (such as the 200-day moving average), with moving averages in a bullish alignment (short-term > mid-term > long-term).

Healthy Pullbacks: Pullbacks during a bull market are usually buying opportunities. Healthy retracements typically range from 38.2% to 50% of the prior advance and should not break below critical long-term trend lines.

Breaking Historical Highs: The mark of entering a primary upward wave is a valid breakout and stabilization above previous highs. These prior highs then become strong support levels.

Current (April 2026) Cycle Positioning

Based on the above framework, analyze the current market:

Macro Drivers: “Weak” bullish signals. Geopolitical risks (such as the Strait of Hormuz) provide support, but expectations of sustained high interest rates (delayed rate cuts) remain a major restraint. Real yields have not yet entered a clear downward channel.

Capital Flows: “Strong” bullish signals. Central bank gold purchases (notably China, India, Poland, etc.) are the core foundation, but recent ETF outflows indicate short-term divergence.

Technical Patterns: “Neutral.” Gold prices are oscillating intensely near historical highs. While not breaking the long-term upward trend, recent deep corrections (such as the March dip to $4,100) show significant market divergence, indicating a high-level consolidation phase within the bull market.

Conclusion: The current gold market is most likely in the middle or later stages of this long-term bull cycle. The core features are “high levels, high volatility, and high divergence.” Whether the bull market ends depends on whether the Federal Reserve shifts toward rate cuts (boosting macro logic) and whether central bank gold buying trends reverse (changing the capital structure). Before clear bear signals appear (such as continuous rate hikes, a strong breakout of the dollar, central banks turning net sellers, or prices breaking below the 200-week moving average), this can be viewed as a complex correction within the bull market.