What will be the impact of the new high in international gold prices

In the first half of this year, the international gold price repeatedly hit a record high. In the middle of last month, the international gold price hit a record high again and then fell slowly, but after entering August, the gold price turned upward again. On the 9th, gold prices rose slightly, with spot gold up 0.17% to $2,430.93 per ounce. On the morning of the 13th, the international gold price rose again, and the London gold price was $2,474.88 / ounce, which was only "one step away" from the historical record of $2,483.78 / ounce. On the same day, COMEX gold futures closed up 1.62 percent at $2,513.4 an ounce, also nearing an all-time high of $2,537.70 set on July 17.

Considering the current global economic situation, geopolitical risks, and market supply and demand, gold prices are likely to continue to rise and reach new highs for some time to come. However, it also depends on a combination of factors and many influences. On the economic front, rising gold prices are often seen as an indicator of inflation risk. Investors could move money into gold, leading to an increase in the money supply, which in turn could spark inflation. The central bank may therefore strengthen monetary policy to control inflation, such as raising interest rates. Gold's new highs could prompt central banks to reassess their monetary policies. For example, an expected rate cut by the Federal Reserve would further boost gold prices, while also affecting liquidity in the global economy. If gold prices continue to rise, central banks may consider adjusting monetary policy to address potential inflationary pressures.

Second, at the market level, rising gold prices are good news for gold mining companies, because the profits of these companies will increase with the rise in gold prices. For example, the share prices of gold miners typically rise with the price of gold, reflecting optimistic expectations about their profitability. However, for downstream enterprises such as gold jewelry sales, the rise in gold prices may bring double pressure. On the one hand, the high gold price increases the procurement cost of enterprises; On the other hand, consumers may take a wait-and-see attitude in the face of high gold prices, leading to a decline in sales. That could lead to a drop in their share prices, reflecting concerns about weakening consumer purchasing power. Higher gold prices could trigger a portfolio reallocation. Many investors will move money from other markets to gold in search of a safe haven and store of value. This may lead to capital outflows from other markets and have a certain impact on the relevant markets.

Third, at the consumer level, high gold prices may inhibit consumers' willingness to buy gold jewelry. Many consumers may view the current gold price as too high and choose to wait for the price to fall before making a purchase. This could lead to a short-term contraction in the market for gold jewellery sales. A rise in the price of gold increases the wealth of those who hold financial assets such as gold bars and coins, while those who do not own gold may feel their wealth redistributed. This is likely to exacerbate the wealth gap in society.

Fourth, at the geopolitical level, new highs in gold prices are often closely related to geopolitical tensions. For example, conflicts and tensions in the Middle East could trigger risk aversion in global markets, pushing investors to move money into safe-haven assets such as gold. That has pushed gold prices even higher and could increase volatility in the market. The rise in gold prices could also have implications for international political relations. For example, a rise in the price of gold may lead to a change in the international trade balance, increasing the gold income of exporting countries and weakening the purchasing power of importing countries. This could lead to trade conflicts and protectionist policies.

To sum up, the impact of the new high international gold price is multi-faceted. These influences may interweave and influence each other, forming complex economic and social phenomena. Therefore, while keeping an eye on the gold price trend, you also need to pay close attention to changes and trends in these related areas.