September 14th - On September 12th and 13th, the price of spot gold saw a significant increase, setting new historical highs.
Analysts believe that this round of gold price increase is influenced by multiple factors, including the strengthening expectation of interest rate cuts by the Federal Reserve, the intensification of geopolitical risks, and the continuous purchase of gold by central banks and investors to hedge risks.
Despite the existence of certain uncertainties in the future trend, overall, the gold price is likely to remain strong for a period of time.
After the London gold closed up 1.85% on September 12th, setting a new historical closing high, the international gold price continued to rise on September 13th, with the London gold reaching a high of $2,586.28 per ounce.
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Analysts believe this is related to the recent interest rate cut announced by the European Central Bank.
On the 13th, the quotes of major domestic gold stores in China also saw a significant increase.
Chow Sang Sang's gold price reached 762 yuan per gram, up 0.13% from the previous day; Chow Tai Fook's gold price reached 758 yuan per gram, up 1.61% from the previous day; and Chow Tai Seng's gold price reached 758 yuan per gram, up 1.61% from the previous day.
Historically, gold prices have shown a certain cyclicality, which is related to various factors such as the global economic cycle, monetary policy, and geopolitical risks.
In the 1970s, when the then US President Nixon announced the decoupling of the US dollar from gold, the Bretton Woods system collapsed, and the global monetary system was in turmoil, leading to a significant increase in gold prices.
At the beginning of 1970, the price of gold was only $35 per ounce, and by January 1980, it had risen to $850 per ounce, an increase of 2,328%.
In the 1980s, as the global economy gradually recovered from the high inflation of the 1970s and monetary policy became more stable, the Federal Reserve adjusted interest rates multiple times to control inflation and economic overheating.
Gold prices fell significantly, dropping to $386 per ounce in 1990, a 55% decrease compared to January 1980.
Entering the 1990s, with the end of the Cold War and the acceleration of economic globalization, the global economy, especially the US economy, entered a relatively stable period.
Gold prices were relatively stable, showing a small decline in fluctuations, with prices falling from $386 per ounce in 1990 to $273 per ounce in 2000.
Entering this century, with the financial crisis and geopolitical tensions in various parts of the world, gold prices rose again.
From 2001 to 2011, the London spot gold price rose from $256 per ounce to $1,895 per ounce, an increase of about 640%.
After 2012, gold prices entered a period of high volatility.
After reaching a high of $1,747 per ounce in 2012, gold prices fell back but rose again after the Brexit referendum in 2016, breaking through a new historical high of $2,073 per ounce in August 2020.
The expectation of interest rate cuts by the Federal Reserve has driven up gold prices.
It is pointed out that the direct reason for the significant increase in gold prices this time is the interest rate cut by the European Central Bank, which has strengthened the market's expectation of a rate cut by the Federal Reserve.
On September 4th, the Bank of Canada cut interest rates for the third consecutive time by 25 basis points.
According to the published economic data, the US PPI rose by 1.7% year-on-year in August, the lowest since February this year; the month-on-month increase was 0.2%, which is basically in line with market expectations.
The market generally expects the Federal Reserve to choose to cut interest rates at the meeting on September 18th, which will reduce the opportunity cost of holding gold, attract more investors to buy gold, and thus drive up the gold price.
In addition, the continuous gold purchases by central banks around the world are also one of the important factors supporting the gold price.
Recent statistics released by the World Gold Council show that global central banks net purchased 483 tons of gold in the first half of 2024, setting a new historical record.
This trend is expected to continue for some time in the future, providing certain support for the gold price.
Since November 2022, China's central bank has increased its gold holdings for 18 consecutive months.
It is expected that the gold price will continue to remain strong for some time in the future.
Analysts point out that when global economic growth slows down or uncertainty increases, investors usually seek gold as a safe-haven asset, which pushes up the gold price.
Conversely, if the global economy performs well, investors may turn to higher-risk assets, leading to a decrease in gold demand and a drop in prices.
With geopolitical events such as the Russia-Ukraine conflict and the Israeli-Palestinian conflict occurring continuously, the market's risk-aversion sentiment is high, and investors are turning to safe-haven assets such as gold.
This trend is likely to continue for some time in the future, especially in the context of an unstable global political and economic environment.
Although some parts of the global economy are performing well, the overall economic growth outlook remains unclear, and many investors may still choose to buy gold to hedge risks.
The future trend of gold prices still has uncertainties.