Gold prices have skyrocketed. Should you buy now or wait a bit longer? 4E low-threshold investment in gold

Gold Prices Are Soaring, Should You Buy Now or Wait? 4E Low-Threshold Investment in Gold

Recently, international gold prices have shown a strong upward trend, continuously breaking through important levels and reaching historical highs. Since February 28, gold prices have been climbing, not only stabilizing at the high point of $2100 per ounce but also nearing the astonishing price of $2190 per ounce recently. The domestic gold market has also followed the international pace, with gold prices continuing to rise, attracting a lot of investor attention.

Main Reasons for Rising Gold Prices: Fed Rate Cuts and Central Bank Gold Purchases

The rise in gold prices is mainly driven by the dual forces of expectations for Fed rate cuts and gold purchases by central banks around the world.

Firstly, the expectation of Fed rate cuts plays a key role in the rise of gold prices. As the U.S. inflation rate gradually normalizes, the market generally anticipates that the Fed will implement rate cuts in the near future. A rate cut means that the "intrinsic value" of the dollar will decline, and gold has historically been on the opposite end of the seesaw with the dollar. Additionally, last Friday's weak ISM manufacturing data in the U.S. further strengthened expectations for a Fed rate cut in June, aiding the rebound in gold prices this week.

Secondly, the continuous buying of gold by central banks is also an important force driving up gold prices. Against the backdrop of expectations for dollar rate cuts and global political tensions, central banks around the world have been increasing their gold holdings to preserve value and hedge against risks. On one hand, rate cuts make holding gold more attractive compared to holding dollars; on the other hand, the instability of the global political situation also prompts central banks to increase their gold reserves to cope with potential risks.

Public data shows that by the end of January 2024, China's central bank's gold reserves stood at 72.19 million ounces, equivalent to 2245.1 tons. It is worth mentioning that this has been the fifteenth consecutive month of increase, with a cumulative increase of 9.55 million ounces (approximately 271 tons).

Compared to the central bank's gold accumulation actions, the enthusiasm of the Chinese public for gold is even higher. Statistics from the China Gold Association show that national gold consumption reached an astonishing 1089.69 tons in 2023. The amount of gold purchased by the Chinese public is nearly four times that of the Chinese central bank.

Market Expectations for Further Increases

As expectations for rate cuts heat up again, Wall Street's optimistic sentiment towards the gold market is growing stronger. Analysts from the well-known financial institution Citigroup recently stated in a report that they are optimistic about the medium-term trend of gold. Analysts pointed out that gold, as a "recession hedge tool" for developed markets, is increasingly highlighting its safe-haven attributes against the backdrop of rising global economic uncertainty. Additionally, they emphasized the uncertainty of the U.S. elections and the ongoing turmoil in the Middle East, believing that these factors could provide a "tailwind" for rising gold prices.

Meanwhile, some market analysts hold similar views, believing that if Trump wins the election, it could trigger market volatility, which would be a significant boon for gold. The long-term instability of the geopolitical situation further solidifies gold's position as a safe-haven asset, leading investors to maintain their optimism.

Domestic Banks Raise Gold Investment Thresholds

However, compared to the soaring gold prices, domestic banks have been raising the thresholds for gold investment. For example, China Construction Bank recently announced that it would raise the minimum amount for personal gold accumulation from 500 yuan to 600 yuan. This move may be to address the risks brought about by the market surge, but it could also affect the willingness of some investors to participate.

4E Commodity Gold Investment: Low Threshold, Low Fees, Supports High-Leverage Trading

For investors looking to participate in gold investment, 4E offers a convenient and flexible option. As a professional investment service platform, 4E is committed to providing investors with low-threshold, low-fee gold trading services. Through 4E, investors can enjoy leverage trading of up to 300 times, allowing for both long and short positions, as well as flexible adjustments to holdings based on market conditions to maximize investment returns. The minimum investment threshold is less than $8, and it supports cryptocurrency deposits.

The current gold market is in a period full of opportunities. With changes in the global economic and political landscape, gold prices are expected to continue rising. Investors should seize this opportunity, choose the right investment platform and strategy, and achieve asset preservation and appreciation. On the road to investing in gold, the 4E platform will always stand alongside investors to embrace market opportunities together.