China News Service, Beijing, March 12 (Wang Lichen) Since late February, international gold prices have continued to rise.
Gold prices may yet to hit their ceiling as multiple uncertainties fuel risk aversion.
Recently, the international spot gold price once approached the historic mark of US$2,200 per ounce. On March 12, it recorded an intraday price of US$2,184 per ounce, which was also a good performance.
The domestic retail price of pure gold in China is also rising, approaching RMB 670 per gram.
On the 12th, domestic brand Chow Sang Sang gold was quoted at RMB 665 per gram, which was at a high level during the year.
Wan Zhe, a professor at Beijing Normal University and former chief economist of China National Gold Group, pointed out in an interview with China News Service that this round of gold price rises is mainly driven by two factors. First, the market's expectations for the Federal Reserve to cut interest rates drive gold prices higher.
Federal Reserve Chairman Powell said in an interview in early February that the Federal Reserve is expected to implement three interest rate cuts this year, each time by about 25 basis points, and is expected to start cutting interest rates as early as May.
Previously, the market had been betting that the Federal Reserve would cut interest rates six times starting in March.
"At present, it seems that the Federal Reserve will not cut interest rates quickly." Wan Zhe said that U.S. core inflation expectations have rebounded. If interest rates are cut too early, previous efforts to fight inflation will be in vain.
Second, there are great uncertainties and policy risks in this year's U.S. presidential election, and international geopolitical conflicts are also continuing.
Wan Zhe believes that these uncertainties have intensified risk aversion and have had a certain impact on the rise in gold prices.
Domestic and foreign institutions are also optimistic that gold prices will remain strong.
Aakash Doshi, head of North American commodities research at Citibank, said gold prices could soar to $3,000 an ounce in the next 12 to 18 months.
The most likely factor leading to this situation is the accelerated de-dollarization of central banks in emerging market economies.
Gold purchases could double as central banks around the world accelerate their gold purchases.
Feng Lin, director of the research and development department of Oriental Jincheng, said in an interview with China News Service that the U.S. dollar index is stable and weakening, and the Chinese people’s relatively strong demand for gold purchases needs to be further released. In the short term, the international gold price will still run at a high level, and another record high cannot be ruled out. Possibility of new highs.
Zhou Zhicheng, a precious metals researcher at Guantong Futures, believes that the current market expectation for the Federal Reserve to cut interest rates is increasingly leaning towards June, and the value of the U.S. dollar itself is falling. In the midst of the U.S. government’s mounting debt, the prevalence of credit depreciation transactions, the turmoil in the election year, and the very uneasy international situation. It is very likely that international gold prices will continue to rise and continue to hit record highs.
"The price of gold is currently at a high level, and any special event may push it up again." Wan Zhe judged that at present, it is inevitable that the price of gold will fluctuate at a high level for a period of time.
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