Recently, the gold price has been continuously rising, breaking records and exceeding expectations. Although the price has fallen slightly, it is still at a high level. What is the future outlook for gold? Will prices continue to rise? On September 30th, precious metal analyst Charles Kennedy gave his opinion.

Four major factors driving the buying frenzy

Kennedy listed the following four factors for the recent rise in gold prices:

① Geopolitical tensions: The ongoing Russia Ukraine conflict and escalating tensions in the Middle East have intensified global uncertainty, prompting investors to turn to safe haven assets such as gold.

② Interest rate cuts: The Federal Reserve's significant interest rate cuts and expectations of further easing have reduced the opportunity cost of holding gold, making it more attractive.

③ Weakness of the US dollar: The depreciation of the US dollar has made gold cheaper for holders of other currencies, further stimulating demand.

④ Economic uncertainty: Continued concerns about global economic growth and inflation have also increased the attractiveness of gold as a hedge against economic instability.

Kennedy pointed out that gold is considered an auspicious metal in India and is an indispensable part of weddings, festivals, and other celebrations. In addition, gold is considered a safe and reliable investment, especially in rural areas where opportunities to enter formal financial institutions may be limited.

High gold prices pose a challenge to Indian consumers and may suppress demand. However, the upcoming holiday and wedding season may provide some support for gold prices in the short term.

The outlook for gold is optimistic, but we still need to be vigilant about potential risks

The outlook for gold remains optimistic, and there are several factors that may maintain the upward trajectory of gold prices. The ongoing geopolitical tensions, the prospect of further interest rate cuts, and the continued weakness of the US dollar are all supporting gold prices. In addition, the growing demand from China and other emerging markets may provide further impetus.

However, investors should also be wary of potential risks. A sudden improvement in the global economic outlook or a hawkish shift in central bank policies may lead to a pullback in gold prices. Therefore, maintaining a balanced and diversified investment portfolio and keeping abreast of the latest market developments is crucial.

The current gold rush has proven the enduring appeal of this precious metal. Gold uniquely combines safety, liquidity, and cultural significance, making it an attractive investment choice in uncertain times. Despite the challenges posed by high prices, the long-term prospects of gold remain bright. As the world faces complex and uncertain situations, the role of gold as a safe haven asset and a means of preservation may become more prominent.

Daily chart of spot gold