Gold prices seem to become “unattainable”. From the international spot gold, Wind data show that on October 21, London gold prices touched 2740.57 U.S. dollars / ounce, reaching the highest price in history. From the futures point of view, COMEX gold futures prices in the October 21 plate touched 2755.4 U.S. dollars / ounce, also hit a record high. This year, the international gold price has dozens of times to refresh the record high.

Domestic gold prices are also basically similar trend, Shanghai gold main contract 2412 in the October 22 plate highest reported 628.38 yuan / gram, hit a record high. Base gold prices sharply upward, so that consumers are usually most often exposed to the price of gold jewelry recently also “rising”, many brands of gold jewelry gold prices are more than 800 yuan / gram.

Longer look, as of October 21 closing, 2024 since the international spot gold prices have risen 31.84%. If the starting point of the current round of gold price uptrend (November 2022), the international spot gold prices have risen 66.49%.

Gold prices have risen rapidly, the follow-up there is room for upward movement? I believe that a variety of factors to consider, short-term view of gold prices or still have the potential to rise.

First of all, the safe-haven property of gold is still one of the main driving force of its price rise. Recently, the global geopolitical risk continues, regional conflicts are still fermenting, the situation is more and more complex, superimposed on the United States election and other uncertainty factors, or global risk aversion to heat up again, the gold hedge value preservation function will also be valued.

Secondly, the fed officially entered the interest rate reduction cycle. Prior to the Fed's several interest rate cut cycle, gold prices tend to be up throughout the interest rate cut cycle. The logic behind this is that the Fed interest rate cuts usually means an easy monetary environment, pushing up inflation expectations, which will reduce the opportunity cost of holding gold, and then increase the demand for investors to hold gold, enhance its investment value. Moreover, the dollar is usually in the fed rate cut cycle in the softening, which makes gold for non-US currency holders cheaper, stimulate the investment demand for gold.

Recently, a number of Federal Reserve officials continued to speak out publicly for the remainder of this year, the Fed continues to cut interest rates to provide guidance on expectations. Fed in November and December there are two interest rate meeting, the market expects these two meetings the Fed is likely to cut interest rates by 25 basis points or more. In the short term, the Fed's interest rate cut process continues to promote the gold price support.

Finally, the global central bank spot reserve demand for gold, will also support the price of gold. The World Gold Council released the “2024 Central Bank Gold Reserve Survey” in late June this year, which showed that 29% of the surveyed central banks (this survey received a total of 70 central bank responses) expressed their intention to increase their gold reserves in the next 12 months, the highest level since the launch of this survey in 2018. The latest data from the World Gold Council showed that global central banks bought a net 8 tons of gold in August, which is still a positive growth trend, although it has fallen back from the high point of demand at the beginning of the year.

In recent years, the accelerated expansion of the U.S. debt scale and other factors, so that the dollar credit impact, the global central banks also continued to raise gold reserves. Buy low is the operation of the central bank to buy gold features, gold prices continue to go up, or affect the global central bank to buy gold rhythm, but the central bank to buy gold is not expected to have a trend change, in this context, the bottom of the gold price support is also stronger.

Comprehensive view of the above three factors, gold prices or still have upside potential. However, it is worth noting that, taking into account the previous market continued to “run” trading Fed interest rate cuts are expected, gold prices have been at the highest level in history, do not rule out profit-taking disk off the market, the gold price retracement of the situation. Investors should fully understand the market risk, develop a reasonable investment strategy, and according to their own risk tolerance for the corresponding investment.