Gold prices have continued to rise since 2025, the new york commodity exchange comex gold prices have risen by nearly 30 per cent, jewellery gold grams have surpassed thousands of dollars and have triggered a boom in gold purchases from professional investors to ordinary citizens。
A combination of multiple factors drives the “crazy gold”. The first is the combined effect of the global central bank’s interest rate reduction expectations and inflation. In theory, gold can be seen as an investment with a constant real rate of return of zero — one gold bar today and one gold bar in the future. As a result, the higher the real return on other investments (e. G. Stocks, bonds), the lower the value of the gold; the lower the real rate of return on other investments, the greater the value of the gold. Real rate of return = nominal interest rate - inflation rate. In other words, the price of gold is negative in nominal interest rates and positive inflationary. With trump using a “tariff stick” to blackmail other countries politically, global economic growth is overshadowed, and the market is expected to warm up interest rates for the central bank of europe and america, with nominal interest rates expected to go down. At the same time, high tariffs and import substitution will further raise inflation levels in the united states, which is expected to rise. Both have contributed to rising gold prices。
The second was the impact of the fall in the united states dollar index. International gold is priced in united states dollars, and the weaker it is, the stronger it is. Trump's “tariff battle” raised concerns in the market about the us recession and the high degree of uncertainty about trump's policy, the serious erosion of the us dollar hegemonic cornerstones of a series of operations, such as trade decoupling, financial sanctions, indiscriminate government debt and interference with the fed's independence, the sale of united states assets by overseas investors, the triple-killing of united states equity bonds, the continuing sharp fall in the dollar index, and the successive breakthroughs of 100 and 99, with the us dollar moving from a strong to a weak cycle, leading to higher gold prices。
Once again, the need for risk avoidance has risen. The intensity of global political and economic conflicts has increased, large-country games have intensified, and risks such as recessions, debt crises and financial market collapses have become increasingly a source of market concern. The risk-averse nature of gold has been highlighted by investors who are partly risk-averse and need to be protected。
Finally, the impact of the supply-demand nexus. The us dollar hegemonic decline, the global trend towards de-dollarization, the reduction of dollar asset allocation by multinational central banks and increased gold to spread risk. Since 2022, global central bank acquisitions have maintained strong momentum and market demand has increased significantly。
Gold still has a long-term investment value, but is at risk of short-term fluctuations. Looking ahead, the european central bank has entered an interest-rate cycle, with the risk of us economic stagnation rising significantly, the downward cycle of the united states dollar index becoming more pronounced, large countries playing a regular game and gold prices still stronger. However, caution is needed with regard to the excessive increase in gold in the short term, the sharp price shocks and the high risk of large fluctuations, as well as the risk of large short-term fluctuations in gold prices for investors, especially non-professional investors, and the inappropriateness of excessive wind and speculation。
Gold is not an “engine of wealth” and investing in gold does not enjoy the “era dividend”. More importantly, gold is of investment value but very limited in terms of diversified asset allocation and risk diversification as an investment. Gold is short-set by the lack of opportunities to reap the dividends of the times. In terms of long-term return on investment, the value of investment in gold is much lower than the assets added to the “era dividend”. For example, during periods of high economic growth, the value-added function of gold could not be compared with other assets, such as real estate, equities, and could even become a “tracket” on the value-added of wealth. In the case of overseas, during the new economy of the internet in the united states in the 1990s, gold went far beyond the nasdaq index. In domestic cases, the wealth gains of gold-holding investors have been much slower than those of real estate investors over the past two decades. Thus, gold is not an “engine of wealth”. At the moment, after the transition from a period of high growth to a stage of high-quality development, china’s economy has fundamentally completed the transition from an era of urbanization dominated by real estate investment to an era of new qualitative productivity dominated by science, technology and innovation, with new quality productivity replacing investment in capital property becoming the first engine of high-quality development for the economy, and the technological revolution and new quality productivity being the engine of wealth。
