Gold Prices Set New Records as Investor Risk Aversion Intensifies
The international gold market has seen a strong upward trend again. On Wednesday, spot gold prices briefly touched $4,218.14 per ounce, setting a new historical high; December-delivery U.S. gold futures settlement prices rose by 0.9% to $4,201.60. Analysts pointed out that the continued upward trend in gold not only reflects investor concerns about inflation and policy uncertainties but also highlights the shift in global market capital driven by safe-haven demands.
City Index and FOREX.com market analyst Fawad Razaqzada stated that the momentum of the gold price increase is continuing and "shows no sign of stopping." He pointed out that with trade tensions re-escalating in recent days, investors are hedging their long positions in the stock market by increasing their gold holdings. "This is a process of global capital reallocation, and gold has once again become a core asset."
Multiple Factors Drive Gold Price Increase of Over 60% This Year
Gold has risen by over 60% so far this year. Industry insiders generally believe that this increase is not driven by a single factor but is the result of multiple macro variables combined.
Firstly, geopolitical uncertainties persist, from the Middle East to Eastern Europe, leading investors to be cautious; secondly, the expected rate cuts by the Federal Reserve continue to rise, significantly enhancing the relative attractiveness of non-interest-bearing assets. Meanwhile, global central banks are accelerating the purchase of gold reserves as part of a de-dollarization trend, strengthening market demand.
In addition, continuous inflows into ETFs have become an important driver of rising gold prices. Data shows that major gold ETF holdings have increased by more than 15% since the beginning of the year, indicating strong confidence in the gold market outlook from institutional investors.
Razaqzada further pointed out: "Gold is only $800 away from $5,000 per ounce, and I wouldn't bet against it reaching that mark." This statement reflects the market's strong belief in the upward potential of gold prices and reveals the positive shift in investor sentiment.
Dovish Signals from the Federal Reserve Weaken the Dollar
The strong performance of gold is also supported by the latest policy signals from the Federal Reserve. On Tuesday, Federal Reserve Chairman Powell reiterated in a public speech that the U.S. labor market remains in a "weak phase of low hiring and employment," suggesting that further interest rate cuts might be on the horizon. As a result, the dollar weakened against a basket of major currencies, further enhancing the relative value of gold.
According to the CME's "Fed Watch" tool, the market currently prices the probability of a 25-basis-point rate cut in October at 98%, with the probability of another cut in December fully priced in. This implies that global liquidity may further ease, providing ongoing support for the precious metals market.
Precious Metal Sector Interconnected Silver and Platinum Also Strengthen
Besides gold, other precious metals have also shown broad strength. Spot silver rose by 2.3% on Wednesday to $52.64 per ounce, continuing the previous day's record high of $53.60. Platinum increased by 0.6% to close at $1,647.55; while palladium slightly declined by 0.2% to $1,523.66.
Analysts believe the performance of silver highlights the resonance effect of its dual industrial and safe-haven attributes, while the divergent trends in platinum and palladium reflect differences in automotive catalyst demand and supply dynamics.
