On August 29, local time, international gold prices once again reached historic highs: the price of gold futures on the New York Mercantile Exchange in the U.S. briefly climbed to $3,518.5 per ounce, while spot gold in London also touched $3,454 per ounce, approaching its all-time high.

　　On the same day, domestic gold prices also rose sharply. The price of Chinese gold investment bars reached 820 yuan per gram, and gold bars traded on the Shanghai Gold Exchange also climbed to 782 yuan per gram.

　　Looking back at the trend of gold futures prices, on April 22, 2025, they reached $3,509.9 per ounce, and on August 8, due to a “blunder” in information from U.S. Customs, they climbed to $3,534 per ounce. However, both times, after briefly breaking above $3,500, prices quickly retraced. So, how will they behave this time?

　　Multiple factors are intertwined, driving gold prices higher.

　　Any single factor—such as geopolitics, central banks’ gold purchases, expectations of interest-rate cuts by the Federal Reserve, and changes in tariff policies—could trigger sharp fluctuations in gold prices. The recent rise in gold prices, which have now reached historic highs, is the result of the combined effect of multiple factors.

　　From the perspective of monetary policy, news on the 29th reported that Federal Reserve Governor Waller said he would support a 25-basis-point interest rate cut in the U.S. in September.

　　In an interview, Wang Hongying, Director of the China (Hong Kong) Institute for Financial Derivatives Investment, stated that Federal Reserve Chairman Powell’s remarks on adjusting interest rate policy in response to the less-than-ideal labor market have led to widespread market expectations that the probability of a Fed rate cut in September is close to 90%. This is one of the key reasons behind the recent rise in gold prices. The anticipation of rate cuts has diminished the attractiveness of U.S. dollar-denominated assets, while gold—being a safe-haven asset and a store of value—has become increasingly favored by investors.

　　The instability of the geopolitical situation is also a key factor driving up gold prices.

　　Recently, the situation in the Ukraine crisis has further escalated. With financial and technological support from the West, Ukraine has launched strikes against targets deep within Russian territory, prompting Russia to launch a large-scale military counterattack. As a result, the situation has suddenly become highly tense. This uncertainty has prompted investors to seek safe-haven assets, highlighting gold’s role as a reliable hedge against risk.

　　On the monetary front, the recent weaker performance of the U.S. dollar is also supporting gold's rise.

　　Wang Hongying believes that, in most cases, the U.S. dollar exchange rate and gold prices have an inverse relationship: generally, when the U.S. dollar index rises, gold prices fall, and vice versa. Recently, this relationship has become particularly evident— the weakening of the U.S. dollar has created room for gold prices to rise.

　　Moreover, from a global perspective on gold purchases, many central banks—including those in China and Turkey—are increasing their gold holdings. This is the primary driving force behind the short-term surge in gold prices. The increased gold holdings by central banks not only reflect their recognition of gold’s value-preservation function but also send a positive signal to the market, attracting more investors to follow suit and buy in.

　　In an interview, Zhao Qingming, deputy director of the Institute of Financial Management Information, pointed out that the interest-rate cut is only a superficial reason and not the underlying, fundamental driver behind the rise in gold prices. After the Federal Reserve maintains high interest rates and then begins to cut them, the U.S. dollar will depreciate, providing some stimulus to global commodities. However, this does not necessarily mean that gold prices will benefit fully. When the Fed cuts interest rates, the U.S. stock market and other commodity markets will receive looser monetary conditions, and capital may instead abandon gold—a safe-haven asset—and shift its focus toward U.S. stocks, which offer greater price flexibility.

　　The gold market presents both opportunities and risks.

　　What will be the future trend of gold prices?

　　Wang Hongying believes that, at present, the risk of a sharp drop in gold prices in the short term is relatively low. Factors supporting gold’s rise—such as expectations of interest-rate cuts, geopolitical and military conflicts, a weak U.S. dollar, and central banks increasing their gold holdings—are still in effect, and structural bullish factors for the medium to long term are showing signs of intensifying.

　　Pan Helin, a member of the Expert Committee on Information and Communication Economics under the Ministry of Industry and Information Technology, believes that “in a bull market, one doesn’t talk about tops.” This upward trend in gold prices is likely to continue for several more weeks. Ultimately, whether gold prices will actually fall in September will depend on whether the Federal Reserve’s interest-rate cut materializes as scheduled in September. At this stage, there are still no significant macroeconomic factors weighing heavily on gold, so a substantial drop in the near term seems unlikely for now.

　　However, it’s also worth noting that gold prices are already at a high level, and the market has to some extent already priced in the impact of interest-rate cuts. Even when the Fed actually begins cutting interest rates, the upward momentum for gold may instead weaken.

　　In the upward trend of gold prices, there are also factors that could trigger a decline—or even a sharp plunge—in gold prices. Once these factors are triggered, they will put tremendous pressure on gold prices.

　　Zhao Qingming, meanwhile, said that the current spot price of gold in London is unlikely to break through the high of $3,500 per ounce. At present, the biggest potential downside factor for gold prices is the changing geopolitical risks—especially the trajectory of the Ukraine crisis. If the situation moves toward peace, the major geopolitical risk factor that has driven gold prices higher over the past three years will be eliminated. As a result, gold prices could fall by at least two-thirds of the gains they’ve made since the outbreak of the Ukraine crisis; this calculation can help identify potential support levels.

　　Moreover, as an investment asset, when the price of gold becomes relatively high, it can trigger investor concerns, prompting them to adopt risk-averse selling behavior and ultimately putting downward pressure on gold prices.

　　Investment requires rational judgment and timely timing.

　　How can one seize opportunities and achieve asset preservation and appreciation when investing in gold?

　　Wang Hongying believes that now is a good time to invest in gold. Based on her assessment of the future upward trend in gold prices, investors can enter the market at an opportune moment.

　　As a beginner, when facing the volatile and unpredictable gold investment market, what areas of knowledge should you focus on to enhance your ability to independently assess the market and identify the right timing for entry?

　　Wang Hongying stated that in short-term trading, investors should learn and master technical analysis tools—such as trend lines, resistance and support levels, and moving averages—to identify market bull and bear trends. They should also familiarize themselves with oscillating technical indicators to pinpoint accurate buy and sell signals, thereby effectively controlling risks and selecting cost-effective entry and exit points.

　　At the same time, it is also essential to have a solid grasp of fundamental knowledge, such as issues related to economic cycles, Federal Reserve policies, and international political, military, and economic conflicts.

　　Regarding the current trend in gold prices, Zhao Qingming pointed out that gold is currently experiencing a “box-like” trading pattern. If geopolitical risks ease, gold prices could fall, and investors might consider entering the market at lower prices. However, if risks persist, gold prices could remain volatile at high levels or even rebound. In such cases, investors could combine technical analysis: buy appropriately when prices pull back to the lower boundary of the box, and consider selling when prices approach the upper boundary.

　　When making investment decisions, investors should remain rational and thoroughly understand market dynamics and various influencing factors. They should neither blindly follow the crowd and chase rising prices nor, on the other hand, miss out on investment opportunities simply because they are overly concerned about risks. Instead, they need to tailor a reasonable investment strategy based on their own risk tolerance and investment objectives.