Industrial perspective: Gold remains the most trend-oriented asset in 2026

Industrial observed that in the early trading hours of the Asian market on Monday, spot gold showed a volatile downward trend. It is currently trading around $4,505/ounce, down about 0.5%, but it is still not far below the historical high ($4,549.69/ounce). In Industrial's view, the trend of gold in 2026 is still generally optimistic about the market.

Despite a number of stock market reversals in the second half of 2025, and significant volatility in many major currency pairs (the dollar was supported during this period, and even maintained an upward trend for most of the Federal Reserve's rate-cutting cycle), gold's trajectory over the past two years has been unusually clear. With the market anticipating that the Federal Reserve may initiate a rate cut in 2026 (expected to be three to four 25 basis points), gold's long position remains attractive.

At the heart of this judgment is the trend of inflation. If inflation unexpectedly picks up, the Fed may soon face the situation of raising interest rates again. But given the policy pressures that accompany such decisions, and the background of the nomination of the new Fed chair (which may theoretically be more inclined to cooperate with the demand for interest rate cuts), the Fed is unlikely to easily reverse the current dovish tone unless necessary.

This view may provide support for optimistic expectations in the stock market. Interest rate cuts and fiscal expansion may create a favorable environment for corporate profits and even stock prices. Looking back at the clear differentiation pattern that the market has shown in the past few years (artificial intelligence-related stocks have benefited significantly, and non-AI stocks have performed relatively laggard), non-AI stocks may gradually become attractive.

But here is the challenge: equities have formed a more solid structure since the April 2025 low rally. Logically, the market has accumulated more long positions, and a sustained upward break could trigger profit-taking pressure. A correction would also be justified if there were signs of rising inflation, forcing the Federal Reserve to create a tighter policy atmosphere.

It is worth noting that since February 2024, the stock market has gone through several stages of correction, the key node of which is the beginning of 2025, when the market experienced a cautious atmosphere rare since the financial crisis due to changes in the policy environment. This kind of fiscal and monetary policy may jointly affect corporate earnings, thereby suppressing stock market performance. It is worth keeping an eye on investors.

Overall, gold has maintained a clear bullish trend, with only three conversions in the form of bullish flags during this period. This persistent pattern often follows long-term gains: while excessive unilateral positions can trigger a staged pullback, when buying enters the correction to form a higher low, the original trend has a basis for continuation. This is exactly what happened in the last two months of 2024, followed by a repeat in April-August 2025 and a continued breakout in late 2025.

(Weekly chart of spot gold, chart source: public platform)

At 9:08 Beijing time, spot gold was quoted at $4,506.62 per ounce.