Core Insights - International gold prices are rising due to expectations of a Federal Reserve interest rate cut, geopolitical risks, and a weakening dollar, with spot gold surpassing $3,380 per ounce and a weekly increase of nearly 3.5% [1] - Citibank has raised its target price for gold to $3,500 per ounce over the next three months, indicating strong long-term bullish sentiment [1] Monetary Policy and Dollar Trends - The expectation of a Federal Reserve interest rate cut is fueled by disappointing U.S. non-farm payroll data, with a 92.4% probability of a 25 basis point cut in September and a potential 50 basis point cut in October, which diminishes the dollar's attractiveness and benefits gold [4] - Global central bank gold purchases increased by 34% year-on-year in Q1 2025, reaching 240 tons, with China increasing its holdings for eight consecutive months, supporting long-term gold prices [4] Geopolitical and Risk Aversion Factors - Tensions in the Middle East, including missile launches from Iran towards Israel and Israel's full occupation of Gaza, have heightened risk aversion, pushing gold prices higher [5] - Trade tensions, such as Trump's tariffs on countries like Russia and India, have raised supply chain concerns, making gold a preferred safe-haven asset [6] Technology and Consumer Demand - Emerging technologies like brain-computer interfaces and nanochips are increasing industrial demand for gold, with predictions of a potential increase in annual demand by thousands of tons in five years [7] - There is a divergence in consumer behavior, with traditional wedding demand remaining strong while some younger consumers are shifting towards "renting" gold jewelry; investors are adopting a wait-and-see approach, hoping for price corrections [7] Market Dynamics - A psychological barrier exists where consumers tend to buy when prices are rising, leading to a 30%-40% drop in sales when prices fall, as they anticipate lower prices [8] - Merchants' promotional efforts, such as reducing processing fees, have limited impact since these fees only account for 1%-2% of the total price [9] Price Expectations - Current gold prices (approximately 780 RMB per gram) are significantly higher than the beginning of the year (around 620 RMB per gram), with consumer price expectations centered around 600-700 RMB per gram [10] Investment and Consumer Strategies - Investors are advised to be cautious of technical pullback risks, particularly if prices fall below $3,200 per ounce, and to avoid high-leverage operations [11] - Long-term strategies include investing in gold ETFs or accumulating gold, with a recommended allocation of no more than 10% of household assets to hedge against inflation and currency depreciation [12] - Consumers in need should focus on wholesale markets for gold priced by gram and avoid high processing fee jewelry [13] - Some consumers are taking advantage of high prices to sell back gold, with ordinary jewelry being discounted by about 10 RMB per gram and high-weight gold bars only 2-3 RMB per gram [14] Future Trends Forecast - Short-term factors driving gold prices include geopolitical risks and interest rate cut expectations, with a target of $3,500 per ounce [15] - Mid-term price corrections may occur if trade tensions ease, potentially pulling prices back to the $2,700-$3,000 range [16] - Long-term prospects suggest a high probability of gold prices exceeding $4,000 due to central bank purchases and weakening dollar credibility [16]