Is the Gold Surge Peaking?

July 12, 2025

Insurance Analysis

Is the Gold Surge Peaking?

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Recently, the world has witnessed a continuous rise in gold prices, captivating market attention and sparking widespread discussionsSince the beginning of 2024, gold prices have surged, not only breaking several historical highs but also prompting investors and consumers to ponder: have gold prices reached their peak? What might the future trajectory look like?

Gold prices shatter historical records

According to recent data, as of February 10, international gold prices had soared to $2878.6 per ounce, equivalent to approximately 676.1 yuan per gramIn the domestic market, leading gold brands like Chow Tai Fook, Chow Sang Sang, and King of Gold also hit record highs, generally maintaining prices above 870 yuan per gramSome brands, such as Caibai Gold, while slightly lower, still reached impressive levels at 832 yuan per gramThese figures not only far exceed last year's levels but also set a new benchmark in recent years.

Over the past year, the momentum of rising gold prices has been nothing short of unstoppableStarting from early 2024, the gold price embarked on a steep ascent, notably breaching the $2200 mark in March, and then surpassing $2600 per ounce in JulyAs the fourth quarter approached, the price continued to maintain its strong upward trend, repeatedly setting new historical recordsBy early 2025, this trend showed no signs of slowing down, as gold prices continued their relentless march upward.

Multiple factors drive the rise in gold prices

Behind the constantly rising gold prices is a combination of several driving factors.

Firstly, the prevailing uncertainties in the global economic landscape have created a robust environment for risk-averse demand for goldIn recent years, the international economic landscape has become increasingly complex, plagued by persistent challenges such as trade disputes, slowing economic growth, and rampant inflation

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Concurrently, geopolitical risks have also surged, with ongoing localized conflicts and heightened tensions in international relationsIn this context, investors find themselves in a fog of uncertainty, growing increasingly concerned about the safety of their assetsThe demand for secure investments has surged, with gold, recognized as a traditional refuge for centuries due to its intrinsic value and global acceptability, becoming the premier choiceWhen economic conditions appear bleak and market confidence wanes, a considerable volume of capital flows into the gold market in droves, providing solid demand support for the price surge.

Secondly, adjustments in monetary policy play a crucial role in the fluctuations of gold pricesAs major economies around the globe, including the United States, the European Union, and Japan, shift their monetary policies towards greater flexibility based on their own economic condition, market liquidity has significantly increasedA substantial amount of capital is found scouring the market for investment opportunities, with the gold market, known for its stability and potential for appreciation, capturing many investors' interestsThis influx of capital acts like adrenaline injected into the gold market, driving prices upwardMoreover, central banks' increased purchases of gold further bolster its price trajectoryData from the World Gold Council serve as a clear indicator of this trend: in the second quarter of 2024, net gold purchases by global central banks grew by 6% year-on-year, reaching 184 tonsAs key players in the national financial systems, the substantial gold buying activities of central banks undoubtedly transmit a strong message to the market — gold holds an indispensable importance in global financial asset allocation, further enhancing investor confidence in gold's future performance and consequently propelling its price upward.

Have gold prices peaked?

Yet, with the ongoing rise in gold prices, discussions about whether they have reached their peak also emerge

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On one hand, some investors argue that gold prices are already at a high level, suggesting limited room for future increasesAdditionally, with the gradual clarification of global economic conditions and potential adjustments in monetary policy, there is a concern that capital might flow out of the gold market, leading to a price decline.

Conversely, certain investors maintain an optimistic viewThey believe that the global economic landscape remains fraught with uncertainties, and geopolitical risks persist, providing continuous demand for gold as a safe havenFurthermore, as major economies continue to adopt accommodative monetary policies, market liquidity is expected to remain robust, leading to further investments flowing into the gold market and pushing prices even higher.

However, it is important to acknowledge that the continuous rise in gold prices is a culmination of current global economic conditions and adjustments in monetary policyPrice fluctuations are normal phenomena in the market, and it is essential for both consumers and investors to adopt a rational mindset, avoiding blind speculation or overly impulsive behaviors.

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Is the Gold Surge Peaking?

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