On September 2, 2025, the spot gold price broke through the $3,500 mark, reaching a high of $3,504.5 per ounce, setting a new record.
The surge in gold prices is by no means a random market fluctuation, but rather a severe test of global financial governance and geopolitical stability mechanisms.
Three factors drive the new gold price high
- The gold market performed strongly this week. After a slight decline on Monday, gold prices rose for four consecutive trading days, bringing the total weekly gain to approximately 2.86%. For the entire month of August, the international gold price rose by 5.002%, its best monthly performance since April this year.
- Expectations of a Federal Reserve interest rate cut are the primary factor driving the gold price increase. Federal Reserve Governor Waller expressed support for a 25 basis point rate cut in September. The market generally predicts a near 90% probability of a Fed rate cut in September.
- Geopolitical instability is also a key factor driving the gold price increase. The escalating crisis in Ukraine and the intensified conflict between Russia and Ukraine have prompted investors to seek safe assets. The weaker US dollar also supported gold's rise. The US dollar exchange rate and gold prices often exhibit a seesaw relationship, and a weaker US dollar provides room for gold's price to rise.
Future Trend: How Long Can Gold Continue to Rise?
Positive Factors: The Bull Market Logic Hasn't Ended
Long-Term Geopolitical Risks: Conflicts between Russia and Ukraine and the Middle East are unlikely to be fundamentally resolved in the near term, and uncertainty surrounding Trump's policies may persist until around the US election.
Normalization of Central Bank Gold Purchases: Goldman Sachs predicts that Asian central banks will continue to increase their gold holdings over the next three to six years, with target reserve ratios potentially pushing gold prices to $3,500 per ounce.
Dual Pressures of Inflation and Recession: The European and American economies face the risk of stagflation, and gold's anti-inflation and safe-haven properties may further strengthen.
Negative Signals: Risks are Accumulating
Pressure for a Correction from Highs: The current gold price has risen by over 40% from its 2024 low, far exceeding its historical average volatility, raising the technical risk of profit-taking.
Potential Supply-Side Shock: Gold mining profits have reached their highest level since 2012, and increased new mine development and recycling could ease supply and demand tensions.
How should investors respond?
Short-term strategy: Be wary of volatility and avoid chasing high prices.
Gold prices are currently at an absolute historical high, making short-term speculative risk extremely high.
Expert advice:
- For those with existing positions: Continue holding, but set stop-loss and take-profit points.
- For those without existing positions: Buy in small batches or diversify risk through gold ETFs to avoid a single large position.
- Long-term perspective: Allocation, not speculation.
Gold's essence is to protect against inflation and provide a safe haven, not a short-term arbitrage target.
- For household asset allocation: It is recommended to limit the gold holding to 5%-10%, diversifying through physical gold bars, accumulated gold, or ETFs.
- Focus on structural opportunities: If the gold price pulls back to key technical support levels (such as $3,000), it could be considered an opportunity for medium- to long-term investment.