Huaxi Securities: The start of a new round of gold rally may have to wait until the expectation of a rate cut by the Federal Reserve is reignited.

Huaxi Securities pointed out that the volatility of gold has significantly increased, and position control is still needed. The implied volatility of gold has continued to climb to 35 since last Thursday, reaching a historical high percentile level of 99.4% since 2009. Behind this is gold entering a sharp decline state, waiting for the volatility to decrease. Looking at a longer period, the medium to long-term logic supporting gold still exists: on one hand, with the acceleration of the geopolitical situation, the marginal weakening of USD credit, and the underlying logic of global central banks "de-dollarization" remains unchanged; on the other hand, the size of U.S. debt continues to rise, and the dependence on loose currency remains high, so there is still no basis for the trend reversal of gold. The sharp pullback in gold prices in this round is more of a deep correction after the previous over-rally, and it is expected that it will take a long time for bottom-building and recovery. The start of a new bull market in gold may have to wait until the resumption of expectations for a rate cut by the Federal Reserve.