Preface:
Friends, have you been keeping up with the price of gold lately? It's been on fire! I heard that the spot gold price is nearing its historical high, and the domestic gold price is also rising, almost reaching 611 yuan/gram. What's going on here? Is it a change in the global economic situation, or is someone manipulating things behind the scenes?
I. Gold Price Soars, Who's Crazy About It?
When it comes to gold prices, it's really not a one or two-day thing. Since the beginning of the year, it has been on a roll, as if it were riding a rocket. Just a few days ago, the spot gold price hit a new high of 2,682 US dollars/ounce, almost touching the historical high threshold of 2,686 US dollars.
The performance of US economic data has provided support to the gold market. Look at the manufacturing data from New York on Tuesday, it was a mess, which directly led to a sharp drop in the yield of 10-year US Treasury bonds. As a result, investors became panicked and started looking for safe-haven assets, and gold is undoubtedly an excellent choice.
Geopolitical tensions are also an important reason for the rise in gold prices. The Middle East is constantly on edge, and the Korean Peninsula is also tense, with the situation ready to ignite at any moment. These tensions are like ticking time bombs, ready to explode the global financial market at any time. To avoid risks, investors naturally turn their attention to gold, this "safe haven".
Advertisement
II. US Monetary Policy, Gold's "Double Insurance"?
US monetary policy is also an important factor supporting the rise in gold prices.
Look, the Federal Reserve officials have been very busy lately. One moment they talk about lowering interest rates, and the next they change their minds saying the economy is strong and the number of rate cuts should be reduced. This fluctuating policy makes investors very uncertain. However, it also gives gold an opportunity to become the "double insurance" in the hearts of investors.
On one hand, if the Federal Reserve really lowers interest rates, the US dollar will depreciate, and the price of gold will rise. In this way, investors can preserve and increase the value of their assets by buying gold. On the other hand, if the US economy performs strongly and the stock market also does well, investors may be more inclined to invest in the stock market. However, due to the uncertainty of the election, investors still dare not easily enter the market. So they turn their attention to gold, this "safe haven".III. Dollar Strengthens, Can Gold Prices Continue to Rise?
However, we cannot only focus on the positive side. After all, the financial market is ever-changing, and no one can predict what will happen in the next second. Take the dollar, for instance; it has been strengthening recently. This, in turn, limits the increase in gold prices. You see, if the dollar strengthens, then investors might be more inclined to hold dollars rather than buying gold, right?
But, let's not be too pessimistic. After all, the trend of rising gold prices has already formed, and it's not that easy to reverse it all at once. Moreover, there are so many factors supporting gold prices behind the scenes. Therefore, we must maintain a rational and optimistic attitude towards this matter.