Core Viewpoint - The article discusses the significant price disparity between gold traded on exchanges and gold jewelry sold in retail stores, highlighting a price difference of 221 yuan per gram, and explores the underlying market dynamics and macroeconomic factors influencing gold prices [1][5]. Macroeconomic Factors Influencing Gold Prices - The fluctuation of gold prices is closely tied to various macroeconomic factors and market sentiments, particularly the sensitivity of international gold prices to changes in the US dollar exchange rate [1]. - A decline in the yield of US 10-year inflation-protected securities by 5% can lead to an 8% to 12% increase in gold prices, indicating the critical role of real interest rates in gold valuation [2]. - Geopolitical risks, such as conflicts, significantly impact gold prices, with the June 2025 Israel-Iran conflict causing a daily price fluctuation of over $68 [2]. - Long-term macroeconomic trends, including IMF's economic growth forecasts and inflation expectations, also drive investor interest in gold as a hedge against wealth erosion [2]. Supply and Demand Dynamics - The global gold mining cost has increased by 24% year-on-year, while production has decreased by 2% in the first quarter of 2025, creating upward pressure on gold prices due to reduced supply [5]. - Central banks, particularly the People's Bank of China, have been increasing their gold reserves, with a total of 73.9 million ounces, contributing to a historical high net purchase of 243.7 tons globally in the first quarter of 2025 [5]. Consumer Behavior and Market Trends - Younger consumers are driving a shift in gold consumption patterns, with products like small-weight gold jewelry seeing a sales increase of 300% [7]. - The distinction between investors and consumers is evident, with investors experiencing significant risks due to price volatility, while consumers are seeking more affordable and diverse gold products [7][8]. Future Outlook for Gold Prices - The current gold market is characterized by complex dynamics, with factors such as the rising US dollar index and delayed interest rate cuts by the Federal Reserve exerting downward pressure on gold prices [8]. - Despite short-term fluctuations, long-term value drivers for gold remain, including ongoing central bank purchases and the global trend of "de-dollarization" [8].