Compared with other assets, the volatility of gold has been relatively low, because this precious metal has maintained a "moderate bull market" state, trading easily between $1800 and $1900 per ounce. But according to MKS PAMP, don't expect gold prices to rebound until market confidence recovers.

Nicky shields, metal strategist at MKS PAMP, said that as inflation concerns gave way to recession fears, stock market investors chose cash instead of safe haven assets such as gold, and the market changed.

She wrote in a report on Thursday: "stocks and other assets have suffered unprecedented losses. Cash / dollar has been returned, while safe haven assets are less serious. Confidence needs to be restored.".

”"The S & P 500 index sold last week, and its correction is in line with the median correction in the post World War II recession, but now it is the fourth serious' non recession correction 'in the same period. We are in a market recession. Technically, SPX entered a bear market on June 13."

She explained that for gold bulls, it is ironic that gold prices may need to see lower yields and higher U.S. stock markets at the same time to rise to the level of $1880 per ounce.

Judging from the current situation, there will be more buyers at $1900 per ounce, rather than $1800 per ounce. "There is a clear lack of interest in the investment community (except retail gold coins / bars)." "The havoc of the stock market and other asset classes has deterred marginal players."

A potential incentive for price increases is that the Federal Reserve "destroyed something" when actively tightening monetary policy.

"Federal funds are only 1.75% (CPI is 8.6%). Last week, the Federal Reserve admitted that there was inflation and decided to raise interest rates by 75 basis points. Overall, the details of the Federal Reserve's statement are quite moderate (they have admitted that the economy is deteriorating). As the data continue to disappoint and major commodity prices respond to concerns about demand destruction, there are more and more comments about the recession," she said

As the Federal Reserve continues to adjust its "unconditional" efforts to maintain price stability, the recession risk is becoming more and more obvious in daily macro data.

She said: "the poor PMI data did not help today's mood much. Industries such as tourism, which are sensitive to consumers and inflation, fell the most in June, and are typical representatives of soaring inflation and consumer tension."

IHS Markit, a research company, said in its latest report that the latest PMI preview data showed that "since the economic slowdown in June caused by Omicron in January, the US private sector output has shown the weakest rebound".

According to the report, the PMI preview value of U.S. manufacturing fell to 52.4 in June, a 23 month low. In June, the PMI of the service industry fell to 51.6, the lowest level in five months.

Shields pointed out that one of the consequences for gold is if the Fed remains too tough.