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1. Core driving forces supporting the continued rise in gold prices Central banks around the world continue to buy gold, building a long-term "ballast" Central banks, especially in emerging market countries, are accelerating the diversification of foreign exchange reserves, with gold becoming an important tool to hedge against the credit risk of the US dollar. The People's Bank of China has increased its gold holdings for 14 consecutive months, and countries like Poland, India, and Turkey are also expanding their gold reserves. The World Gold Council points out that this trend is not a short-term hedge, but a structural reconstruction of the global reserve system, providing solid bottom support for gold prices.
Lower interest rate expectations reduce holding costs The market generally expects that the Federal Reserve will cut interest rates by 50 to 75 basis points in 2026, and the decline in real interest rates will weaken the attractiveness of dollar assets, increasing the allocation value of non-interest-bearing assets such as gold. Historical data shows that periods of loose monetary policy are usually accompanied by a rise in gold prices.
Normalization of geopolitical risks boosts demand for safe-haven assets The tense situation in the Middle East, the unresolved Russia-Ukraine conflict, the uncertainties of the US election, and the deepening US-China rivalry have kept global risk premiums high. Gold's status as a "neutral asset" is being revalued, with its safe-haven attributes shifting from "impulsive" to "long-term allocation."
The trend of de-dollarization strengthens gold's strategic role The tariff policies of the Trump administration and political interference with the Federal Reserve have raised concerns about the independence of the US dollar and the stability of its credit anchor. Gold is evolving from a traditional safe-haven tool to a strategic reserve to respond to the reconstruction of the international monetary system.