Gold Soars: Jewelry Nears $800/Gram, Will Fed Rate Cuts Push Prices Higher?

News / 2024-10-02

Gold is almost 800 yuan per gram! Faced with the increasingly high price of gold, consumers really find it hard to buy. So, will gold prices continue to rise in the future? It might indeed continue to rise!

Over the past year, what state has the price of gold reached? Some brands' gold prices are close to 800 yuan per gram! A few years ago, gold was only four to five hundred yuan per gram, and now it's almost 800 yuan per gram!

Moreover, the higher the price of gold rises, the more gold-selling stores close down. Why? After the price surges, consumers are tight on money and really can't afford to buy! Therefore, the more the price of gold surges, the lower the sales volume. Consequently, gold stores can't sell their goods and can't make money, so they naturally close down.

As a result, many people want to ask: What will be the trend of gold in the future? Will gold prices continue to rise? I'm sorry to tell everyone that it is very likely that in the next six months to a year, gold prices will continue to soar. The US dollar has entered a rate-cutting channel. The Federal Reserve announced a rate cut of 50 basis points in the early morning, and in the future, the Federal Reserve will cut rates significantly. Will gold prices strengthen after the US dollar cuts rates? Absolutely! Why? Several reasons:

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The US dollar has interest, while gold has no interest. If the US dollar raises interest rates, the opportunity cost of gold decreases; and if the US dollar cuts interest rates, it is equivalent to the opportunity cost of gold increasing, so funds are more willing to pursue gold.

After the US dollar cuts interest rates, the US dollar will become weak, and the prices of all items priced in US dollars will rise, including gold.More critically, when the US dollar undergoes an interest rate cut, a significant amount of dollars will flow out of the United States to pursue a variety of high-quality assets. Consequently, we observe that in our country, following a US dollar interest rate cut, the economy experiences an immediate impact—currency markets, stock markets, and real estate markets all soar. We even anticipate that within the next six months, many of our basic necessities could potentially increase in price, and we might escape deflation and welcome inflation. In other words, due to the US dollar interest rate cut and the booming economy, almost all material prices are on the rise, and gold prices could also ascend.

The US dollar has already entered an interest rate hike cycle, and over the next six months to a year, the United States will continue to lower interest rates. Under these circumstances, it is indeed possible that international gold prices could break through $3,000 per ounce; and as for domestic gold prices for jewelry, could they reach 1,000 yuan per gram? We might truly face the highest gold prices in history!

Those who purchased gold earlier have certainly gained an advantage, as their investment has appreciated in value; but in the future, facing increasingly higher gold prices, would you still be willing to buy?