Core Viewpoint - The recent surge in gold prices to $3,300 per ounce is primarily driven by geopolitical tensions, particularly the potential military action by Israel against Iran's nuclear facilities, alongside expectations of economic slowdown and inflation in the U.S. which are favorable for gold [1][4]. Factors Influencing Gold Prices - The main factors affecting gold prices include: - **Dollar Exchange Rate and Interest Rate Policy**: A weaker dollar enhances gold's appeal as a safe-haven asset. The current dollar index is around 100, providing support for gold prices. Expectations of interest rate cuts by the Federal Reserve in 2025 (projected cuts of 75-100 basis points) reduce the opportunity cost of holding gold, benefiting its price [7]. - **Geopolitical Tensions and Safe-Haven Demand**: Recent fluctuations in U.S. tariff policies and uncertainties surrounding the Russia-Ukraine ceasefire have heightened risk aversion. Historical data indicates that geopolitical conflicts typically boost gold prices by approximately 12% [7]. - **Inflation Outlook**: Gold is known for its anti-inflation properties. As a non-fiat currency, its scarcity and stability make it a valuable asset during periods of declining purchasing power of paper currency. For instance, during the high inflation period of the 1970s in the U.S., gold prices soared from $35 to $800 per ounce [7]. - **Central Bank Purchases and Supply-Demand Dynamics**: In 2024, global central banks are expected to net purchase 1,045 tons of gold, reflecting a continued trend of de-dollarization in emerging markets [7]. 2025 Gold Price Outlook - Currently, gold prices are experiencing high-level fluctuations, with resistance at $3,500 per ounce and support between $2,900 and $3,200 per ounce. Financial institutions predict that gold prices may exceed $4,000 per ounce by 2026, driven by global debt expansion, with U.S. debt projected to reach $44 trillion, and potential restructuring of the monetary system [9]. - Gold is increasingly viewed as a viable asset allocation option, with recommendations suggesting that gold should not exceed 20% of household assets. A diversified approach involving gold ETFs, physical gold bars, and mining stocks is advised to mitigate risks. Gold serves as a long-term tool against credit depreciation, despite experiencing a prolonged bear market from 2011 to 2015 [9]. - Short-term fluctuations in gold prices are likely influenced by Federal Reserve policies and geopolitical developments, but the long-term outlook remains positive due to weakening dollar credit and global debt risks [9].