On July 9, Caijing News (edited by Zhou Ziyi), how long can the 'gold rush' that has set record highs this year continue? ING analysts wrote in a recent report that due to ongoing global geopolitical concerns and the impact of macroeconomic conditions, gold prices are expected to rise further and the record-breaking rise in gold prices is likely to continue until the end of 2024.

Gold prices have risen about 15% so far this year, with most of the trading prices of gold hovering above $2300 per ounce in the second quarter. It has risen for three consecutive quarters, making it the best performance since the COVID-19 pandemic. Last week, gold prices experienced a strong rebound on the market as the market expected the Fed to cut interest rates in September. However, as some investors choose to depart with their profits, the price of US gold futures fell significantly on Monday, July 8, with COMEX gold futures for July delivery falling 1.4% to $2355.20 per ounce. COMEX silver futures for July delivery also fell 2.4% to $30.618 per ounce.

The bull market for gold is not over yet.

ING Group said that gold prices have set record highs this year, mainly benefiting from the surge in safe-haven demand. Firstly, the escalating conflicts in Ukraine and the Middle East, as well as the uncertainty of the global geopolitical situation, have prompted investors to seek safe havens. Secondly, changes in the global macroeconomic environment, such as rising inflation pressures and slowing economic growth, have also further pushed up the demand for safe havens.

As a traditional safe-haven asset, gold has naturally become the first choice for many investors.

In addition to the demand for safe havens, central bank purchases are also one of the important factors driving the rise in gold prices. Central banks in major countries and regions are actively increasing their gold holdings. Data shows that global central banks bought 10 tons of gold in May this year, among which emerging market central banks were the main buyers.

Data from the World Gold Council (WGC) shows that in 2023, central banks around the world bought a total of 1037 tons of gold, the second-highest level in history, second only to the 1082 tons in 2022. It is expected that the trend of central bank purchases of gold will continue for some time to come. A survey by the association shows that 29% of central banks surveyed plan to increase their gold reserves in the next 12 months, the highest level since the survey began.

However, the People's Bank of China has recently suspended its gold purchase plan and has not increased its gold reserves for two consecutive months in June. WisdomTree strategist Nitesh Shah has interpreted this move as the Chinese central bank waiting for further pullbacks before restarting its gold buying plan.

In addition, market expectations of a US interest rate cut have also supported the rise in gold prices. As US economic data weakens, the market generally believes that the Fed will cut interest rates this year.

Interest rate cuts will reduce borrowing costs and usually support the appeal of interest-free gold; in addition, interest rate cuts will also push the US dollar weaker, further boosting gold prices. Currently, the market generally expects the Fed to make its first interest rate cut in September, and may implement multiple interest rate cuts this year.

Therefore, gold prices are expected to continue to rise in the future, mainly due to the continued impact of the above three factors: the global geopolitical situation is still uncertain; the trend of central bank purchases of gold is expected to continue; and the increase in market expectations for a US interest rate cut will further boost gold prices.

In addition, data shows that in May, global gold ETF inflows turned positive for the first time in a year, led by Europe and Asia. When gold prices rise, investors usually increase their holdings of gold ETFs, and vice versa. The inflow of ETF funds turning positive reflects the market's positive sentiment towards gold.

ING Group predicts that gold prices will reach $2300 per ounce in the third quarter of this year, rise to $2350 per ounce in the fourth quarter, and maintain at $2350 per ounce in the first quarter of next year.

ING Group expects the price of gold to reach $2,300 an ounce in the third quarter of this year, rise to $2,350 an ounce in the fourth quarter, and maintain at $2,350 in the first quarter of next year.