Gold prices have skyrocketed, and now they are close to 800 yuan per gram. Friends who bought gold in the past two years have made a profit. But will gold prices remain high in the future? It is very likely that in the next six months to a year, gold prices could even rise to 1000 yuan per gram. Why is that?

In the past two years, gold has really gone crazy. As the saying goes, "In times of prosperity, collect jade; in times of chaos, collect gold." The world has indeed been chaotic these two years. The Russia-Ukraine conflict has been going on for more than two years, and the Israel-Palestine conflict is approaching its first anniversary. Coupled with the U.S. election and the division between the two parties, this has led to increasing global chaos and a poor economic outlook. As a result, more and more people are willing to regard gold as a safe-haven asset. So, what will the trend of gold be in the next two years? Due to the U.S. dollar interest rate cut, gold prices could indeed continue to rise significantly in the next six months to a year. As the world's reserve currency, the U.S. dollar's interest rate hikes and cuts often determine the price trends of many bulk commodities.

We often say that investing in the U.S. dollar and investing in gold are different. The U.S. dollar has interest, especially in the past two years to curb the staggering inflation in the United States, the Federal Reserve has raised the interest rate from 0% to 5.5%. In other words, you don't have to do anything; you just need to deposit U.S. dollars in a U.S. bank, and you can get an annual return of more than 5%. On the other hand, gold, as a precious metal, does not have interest. No matter whether you buy gold bars or gold jewelry, what you have to wait for is the rise in gold prices, rather than receiving interest every month or year.

Advertisement

It is precisely for this reason that when U.S. dollar interest rates fall, gold prices will rise. Why? It's a matter of opportunity cost. When U.S. dollar interest rates are high, some funds chase the U.S. dollar, but now that the U.S. dollar has cut interest rates and no longer offers such high returns, many funds believe that the opportunity cost of the U.S. dollar is not significant and should chase gold instead. On the other hand, after the U.S. dollar interest rate cut, the U.S. dollar will become weaker, and the prices of all bulk commodities priced in U.S. dollars will almost all rise. Therefore, we have seen that in the past week, due to the impact of the U.S. dollar interest rate cut, our country's foreign exchange market, stock market, and real estate market have all risen significantly.

We even say that it is possible that the prices of our basic livelihood materials will also rise in the future, and we will move away from deflation and enter inflation, with the prices of all materials rising. Naturally, this will also include gold. Moreover, there is an even more fatal factor: the U.S. dollar has entered the interest rate cut channel. Federal Reserve officials have indicated that there could be at least another 50 basis points cut this year, followed by more cuts next year. After all, a benchmark interest rate of around 5% is still too high.

The United States is very likely to reduce its benchmark interest rate to 2% or even back to 0%. Such a large reduction and such a long interest rate cut channel will naturally make the U.S. dollar continuously weaker, and the prices of various bulk commodities priced in U.S. dollars are likely to rise. This includes gold, so we say that gold prices could indeed break through $3,000 per ounce in the future, and the price of gold jewelry in the domestic market could indeed break through 1000 yuan per gram. This is really a sky-high price.Many young people are getting married, and why was gold only a little over 400 per gram two years ago, but now it's almost 800 per gram, which is really too much of an increase to bear. Moreover, there is an interesting phenomenon, that is, we chase the rise and kill the fall in the real estate and stock markets. We buy when prices rise and not when they fall. The higher the price, the better the transaction volume, which is why the stock market created nine miracles on September 30th.

However, the gold market is not like this. In the past two years, as the price of gold has become higher and higher, the sales volume of gold has been continuously decreasing. Why? On the one hand, consumers wonder if gold can still rise, and on the other hand, the high price of gold makes people unable to bear it. As a result, the higher the price of gold rises, the more gold shops are unable to sustain their operations due to poor sales. So, if the price of gold continues to rise in the next two years, will the sales volume continue to decrease?