Gold prices rebounded on October 9. Earlier, as investors weighed the Federal Reserve's uncertain interest rate path against growing concerns over high US debt levels, gold prices hit a two-month low on Wednesday before rebounding over the following two sessions, with COMEX gold closing up 1.52% at $4,220.3 per ounce.

According to WisdomTree commodity strategist Nitesh Shah, rising yields appear to highlight that market concerns about high debt levels are spreading. If debt rises, gold could become favored. Meeting minutes showed that Fed policymakers were divided last month on the case for rate hikes. While "some participants" believed rate increases were needed to curb the impact of energy and other price shocks, the more hawkish core group argued it was necessary to guard against emerging demand-driven inflation.

Nitesh Shah believes the meeting minutes highlight that there is no truly preset path here, which has slightly increased volatility in the gold market. Fed Governor Christopher Waller said on October 8 that further rate hikes may still be needed, but added that the pace of hikes has "flexibility" and left room for a pause in October. According to CME's FedWatch tool, traders see a 17% probability of a rate hike in October, but price in an 81% probability for December. Rising interest rates erode the appeal of non-interest-bearing gold.

In terms of positioning, according to an analysis by Soochow Securities, global gold ETF holdings increased by a net 1.50 million ounces in September, with ETF holdings seeing contrarian net inflows, indicating that long-term allocation funds continued to position during the pullback. Founder CIFCO Futures believes that global central banks' willingness to buy gold remains strong, while investment demand is showing signs of contrarian positioning. China's gold imports from January to August this year have already exceeded annual import volumes of previous years. Apart from approximately 80 tonnes added by central banks, private imports have also increased significantly.

The institution believes that the gold and silver market will still face bottom-finding in October, with the possibility of breaking below the July low, but the medium- to long-term upward logic remains unchanged, and downstream industrial buyers can patiently wait for hedging demand. This round's bottom will be a good entry point for medium- to long-term allocation.