Gold Price Trend: Future and Present 🔥

The Federal Reserve (FED) cut interest rates by 25 basis points in September, and gold prices fell by 0.83% that day. It fell. But don't get me wrong, this is just a temporary adjustment. Gold has performed beyond expectations this year! It has already surpassed $3880, marking the most astonishing pump in 30 years. It's really incredible. 🚀

Why has gold suddenly become so popular?

There are several reasons for the surge in gold prices:

1. Everyone believes that the Federal Reserve (FED) will continue to cut interest rates 💹 The employment market in the United States is not looking good. The economy seems to be going downhill Money is starting to flow into gold.

2. Central banks are going crazy buying gold 🏦 China has been hoarding since March 2022. Central banks worldwide net bought 123 tons in the first half of this year. In June alone, it increased by 22 tons.

3. Confidence in the US dollar seems to be waning 📉 73% of central banks believe the future status of the US dollar will decline. It seems that countries are all looking for alternatives to the US dollar.

4. Other Factors The new government's tariff policy in the United States is a bit difficult to predict 🌐 Global economic growth seems to be slowing down. Inflation is still a problem. Geopolitical tensions are somewhat tight.

Why did gold prices fall after the interest rate cut?

The market has long known that interest rates would be cut, and a 25 basis point reduction is not surprising at all. No surprises. Powell stated that this is just a "risk management-style rate cut," and he did not explicitly say that further cuts will continue, which left the market somewhat disappointed.

Remember a simple principle: When real interest rates fall, gold prices pump. When real interest rates rise, gold prices fall.

What do the experts think? 📊

• UBS said: 3800 by the end of the year, 3900 by mid-next year.
• Goldman Sachs predicts: 3700 by the end of the year, 4000 by mid-next year
• Morgan Stanley believes that it will exceed 3800 by the end of the year and will break 4000 in the first quarter of next year.

The physical gold market in China is also very hot, with the price of pure gold exceeding 1050 yuan/gram at the beginning of September. An unprecedented high price. 🌕

Is it still a good time to enter the market?

Gold is expected to pump in the medium to long term until 2026, but be aware:

1. Short-term opportunity 📈 Liquidity is good, and the direction is easier to judge. Experienced individuals can give it a try.

2. Newbies be careful ⚠️ First, use a small amount of money to test the waters. Don't blindly chase the highs, really don't. You may need to learn to read U.S. economic data.

3. Friends who buy physical gold 💰 Be mentally prepared, as the volatility is very high. The average annual volatility of gold is 19.4%, which is higher than the 14.7% of the S&P 500. The gold cycle is long, and the buying and selling costs are extremely high(5%-20%)

The most important thing is to diversify your investments. Going all in on gold is not a good idea, even if it seems very safe. Asset allocation should be cautious. It seems many people have forgotten this point.🔍