Core Viewpoint - Gold prices have shown significant volatility, reaching $5200 per ounce on February 26, 2026, following a peak of $5500 at the end of January. The price has increased approximately 20% year-to-date, driven by central bank purchases, expectations of Federal Reserve rate cuts, and geopolitical risks [1][6]. Price Movements - In February 2026, gold prices experienced extreme fluctuations, with a low of $4402.06 on February 2, marking a 19.6% drop from the January high. The price rebounded sharply, with a single-day increase of $289.6 on February 3, reaching $4970.5, the largest daily gain since 2009 [3]. - By February 9, gold prices surged to $5047.257, and on February 20, they rose by 2.2%, challenging the $5100 mark [3]. Central Bank Purchases - Central bank gold purchases have been a crucial support for gold prices, with global net purchases reaching 863 tons in 2025 and expected to remain between 700-850 tons in 2026. The People's Bank of China has increased its gold reserves for 15 consecutive months, totaling 7.419 million ounces by the end of January 2026 [6][9]. - A survey indicated that 95% of central banks anticipate continuing to increase their gold holdings in 2026 [6]. Geopolitical Risks - Geopolitical tensions, including potential military actions involving Iran and the expiration of a key arms control treaty between the U.S. and Russia, have heightened demand for gold as a safe-haven asset [7]. Market Sentiment and ETF Flows - Gold ETFs have seen consistent net inflows, with significant purchases reported in February 2026. For instance, on February 24, a gold ETF recorded a net inflow of 5966.52 million yuan [4]. - The SPDR Gold Trust experienced a record outflow of 82 tons on January 30, 2026, reflecting market volatility [12]. Price Predictions - Various financial institutions have differing forecasts for gold prices. JPMorgan maintains a year-end target of $6300 per ounce, while UBS predicts a mid-year peak of $6200. Goldman Sachs expects a gradual increase to $5400 by year-end [9][18]. - The volatility in gold prices is expected to continue, with daily fluctuations reaching up to 6% [18]. Supply and Demand Dynamics - Global gold demand surpassed 5000 tons for the first time in 2025, driven by technological sectors. However, gold supply growth remains slow, with mining output increasing by less than 1% annually [12]. - The changing dynamics of the dollar credit system are influencing gold pricing, with gold's share of global reserves rising to 24% as the dollar's share falls below 60% [12].