Konstantin Oldenburger, a market analyst at CMC Markets, said that the correlation between the Japanese yen and gold prices has returned, and the appreciation of the yen may be very beneficial for gold.

Oldenburger said, "Last Thursday, the Bank of Japan may intervene in the foreign exchange market to support the yen, and as the Federal Reserve may change the monetary policy of the United States, such intervention may become easier in the future

Oldenburger stated that the US stock market benefits particularly during periods of rising or high interest rates, as liquidity returns to the US dollar. He said, "When interest rates fall, this liquidity flows out of the US dollar and into other investment opportunities around the world. The Japanese yen can now benefit from this redistribution

After the release of June CPI data by the United States last Thursday, the US dollar fell more than 2% against the Japanese yen, and there were rumors that the Japanese Ministry of Finance intervened.

Oldenburger said, "If last week's trend, driven by lower CPI and expectations of Fed rate cuts, continues, the yen may rise as gold prices move towards historical highs

The analyst added, "Hedge funds currently hold very few long positions in the Japanese yen, only short positions that need to be filled when there is a short squeeze. If the yen continues to appreciate, hedge funds may face greater pressure to reduce their holdings. Historically, the strengthening of the yen has been positively correlated with gold, indicating that gold may also benefit

Oldenburger pointed out that the gold price has been consolidating between $2431-2290 per ounce in the past three months. Since early July, investors have been trying to break through this range, which could push gold prices towards $2700. On the contrary, if the gold price falls below $2290, it may further correct to $2220 and $2189.