Gold prices hit another record high, why the price keeps soaring?

Recently, the price of gold continued to rise, the international gold price continued to hit a record high, London gold stood on the $2300 per ounce mark, COMEX gold futures for the first time to test the $2350 per ounce mark, creating history! Retail gold also made a historic breakthrough. What is the underlying force behind this surge in gold prices, and where will the price of gold go in the future?

The reasons behind the surge in gold prices usually interact with a variety of factors. First of all, the instability of the global economy and situation has had a very significant impact on the price of gold indeed. When the global economy or the situation is unstable or volatile, it will cause many investors to worry about the future economic trend, many investors will choose to transfer funds to relatively more stable investment varieties, and gold as a safe haven asset, naturally will be favored. Investors buy gold to avoid risk, funds further flow to the gold market, central banks will also carry out a large amount of gold reserves to resist the risk, thus pushing up the price of gold.

Second, changes in monetary policy can also affect gold prices. In particular, the US dollar index is weak, and there is a certain negative correlation between gold and the US dollar, and when the US dollar is weak, the price of gold may rise. The huge debt accumulated by the United States over a long period of time, and the trend of the dollar's continued depreciation. In order to deal with the economic problems, the US government issued more and more US bonds, which led to the continuous depreciation of the US dollar and increased the instability of the global financial market. Faced with this situation, countries have taken actions to try to avoid financial risks. Among them, selling US Treasuries and converting the money into real assets has become a popular choice. Because gold is scarce and a relatively stable store of value, central banks have increased their gold reserves to avoid the risk of currency depreciation. However, it is this collective action that has driven the continued rise in the price of gold, which has gradually become a safe haven for global funds. In addition, supply and demand is also an important factor affecting the price of gold. The supply of gold is relatively stable, while the demand side is influenced by global central bank purchases, private consumption and investment demand. If demand outstrips supply, the price of gold could rise.

With the current high price of gold, is it possible for gold prices to continue to rise in the future? In the short term, the Federal Reserve this year from the interest rate hike cycle to the interest rate cut cycle has been regarded as a definitive event, the market will be more bullish on gold, and under the influence of geopolitical factors such as hedging, the international gold price or will be in a high state of operation. In the medium and long term, the trend of gold prices will be affected by multiple factors such as global economic recovery, the direction of monetary policy, and the geopolitical situation. If the global economic recovery continues and inflation is brought under control, gold prices could come under downward pressure. However, if geopolitical risks persist or the global economic recovery stumbles, gold prices could continue to rise.

At present, the world's political and economic situation is becoming increasingly complex, geopolitical turmoil is intensifying, especially the escalation of tensions in the Middle East, the price of oil and other commodities has risen significantly, and the global economic environment is facing more uncertainties, in this case, gold as a safe haven asset will receive continued attention. Therefore, for investors, gold can be used as part of a diversified portfolio to diversify risk.