China's Securities Daily Warns Against Chasing Gold at Current Levels

Chinese financial commentary outlet Securities Daily has warned investors against chasing gold at its current elevated levels.

The commentary argues that the metal's near-term outlook is clouded by policy uncertainty and stretched technical conditions.

The single biggest variable for gold remains the trajectory of US Federal Reserve policy, according to the piece.

The current rally has been built on expectations that the American economy is losing momentum and that the rate-hiking cycle has run its course.

However, the commentary stressed that the inflation outlook underpinning those assumptions is far from settled.

Should price pressures surprise to the upside, the Fed would likely be forced to hold rates higher for longer, a shift that would push Treasury yields up and weaken the investment case for a non-yielding asset like gold.

This could potentially trigger a fast correction in the market.