Gold is rising, with a different price every day. Should we take action?

Recently, the global gold market has been booming. On April 8, international gold prices once again reached a historic high, hitting $2,353 per ounce, while the retail price of some domestic brands of pure gold jewelry approached 720 yuan per gram. This series of new highs has attracted widespread attention from the market and enthusiastic pursuit from investors.

Data shows that in the past 10 days, gold prices have risen on 9 days, and in the past 7 weeks, there have been 6 weeks of upward trends. Such a trend is rare in history. Notably, in just the past March, the price of gold denominated in RMB saw a monthly increase of 9.68%, setting a new record.

Surge in Orders, Banks Need to "Wait for Goods"

Investor enthusiasm for gold seems to be growing, which has led to a tight supply of investment gold products like gold bars. Purchasing gold bars from banks usually requires locking in the gold price, and then sourcing the products from supply factories or warehouses based on customer orders. However, the recent surge in orders for gold bars has created a tense supply situation, forcing banks to wait or urge suppliers, resulting in longer waiting periods for customers, typically around 7 working days.

Multiple Factors Driving Gold Price Up

The continuous rise in gold prices to historic highs is driven by a combination of factors, from escalating geopolitical risks to uncertainties in monetary policy, all injecting strong momentum into gold as a safe-haven asset.

1. Primarily Driven by Central Bank Gold Purchases

In recent years, the trend of de-globalization has gradually intensified, challenging the credit foundation of the dollar. Since 2018, the acceleration of de-globalization has gradually eroded the foundation of dollar credit, leading to a decline in market confidence in the dollar. Additionally, domestic economic policies and diplomatic actions in the U.S. have also impacted the dollar's strong position. Since the outbreak of the Russia-Ukraine conflict in 2022, global dollar reserves have rapidly declined, while gold reserves have significantly increased.

The People's Bank of China has increased its gold holdings for 17 consecutive months, with the amount exceeding 140 billion yuan in March.

According to a recent report from the World Gold Council, global central banks net purchased 19 tons of gold in February, marking the ninth consecutive month of growth. Besides China, the National Bank of Kazakhstan net purchased 6 tons of gold, increasing its holdings by 12 tons this year; the Reserve Bank of India also net purchased 6 tons, with over 13 tons added this year; the Czech National Bank increased its gold purchases by about 2 tons, marking the 12th consecutive month of purchases over 1 ton. Additionally, the Central Bank of Turkey added 4 tons, and the Monetary Authority of Singapore net purchased 2 tons.

Meanwhile, domestically, due to the phenomenon of asset scarcity, traditional investment channels such as the stock market and real estate market have continued to decline, and various funds and wealth management products are also under scrutiny. In this context, investors have begun to seek other investment channels that can preserve value, with gold, as a traditional safe-haven asset, naturally becoming their first choice. Data shows that domestic private gold purchases far exceed those of the central bank.

2. Expectations of Dollar Interest Rate Cuts

The market generally expects that the dollar may enter a rate-cutting cycle in the future. Rate cuts typically lead to currency depreciation, which in turn pushes up the prices of non-yielding assets like gold. Historical data shows that each time the Federal Reserve shifts from tight to loose monetary policy, it is almost always accompanied by a significant rise in gold prices. In a low-interest-rate environment, investors are more inclined to purchase safe-haven assets like gold to protect their wealth from inflation erosion.

3. Geopolitical Risks and Safe-Haven Demand

Currently, global geopolitical risks are on the rise, particularly the tensions in regions like the Middle East, which have heightened market risk aversion. In such turbulent times, gold, as a safe-haven asset, has gained recognition in the market. Investors purchase gold to hedge against potential political risks, thereby driving up gold prices.

Divergence in Future Gold Price Trends

There is a certain divergence in the market regarding the future trend of gold prices. Some investors believe that the rapid rise in gold prices may lead to overheating in the market, posing certain bubble risks.

Conversely, some investors remain optimistic about gold prices, believing that despite the significant increase, many factors continue to support further price rises. Geopolitical tensions, the Federal Reserve's monetary policy, and especially the global increase in central bank gold reserves, along with market concerns about inflation, all provide sustained upward momentum for gold prices.

4E Gold Trading, Supporting 300x Leverage Long and Short Trading

The future trend of the gold market has sparked heated discussions and divergences among investors. In such a market environment, investors are also beginning to seek suitable investment channels.

4E, as a leading global compliant trading platform and the official global partner of the Argentine national team, offers investors a convenient and flexible gold trading option. Through 4E, investors can enjoy leverage trading of up to 300 times, supporting both long and short positions, with a minimum investment threshold of less than $8. Additionally, 4E supports cryptocurrencies, forex, U.S. stocks, indices, oil, silver, and other commodities, providing investors with a wide range of investment opportunities.

The market remains hot, and gold investment presents unprecedented opportunities. Whether focusing on short-term fluctuations or long-term trends, it is essential to fully consider market factors and personal risk preferences to make informed investment decisions. As a professional investment service platform, 4E is committed to providing safe, stable, and efficient services to investors, enabling them to seize opportunities in the gold market and achieve wealth appreciation.