In recent days, international gold prices have broken through resistance levels and moved higher in a one-way rally. Driven by this, gold prices denominated in renminbi have reached new highs. On October 17, investment gold bar quotes from multiple banks broke through 1,000 yuan per gram for the first time. This means purchasing a 100-gram gold bar now costs approximately 100,000 yuan, compared to around 63,000 yuan at the beginning of the year.
Gold jewelry prices have also risen accordingly. On the 17th, brand jewelry stores including Chow Tai Fook quoted pure gold jewelry at 1,279 yuan per gram, representing a 32 yuan increase from the previous day and a 111 yuan increase from one week earlier.
Looking at broader market prices, on the 17th, both domestic spot gold and futures prices broke through the 1,000 yuan per gram threshold during trading. By market close, Shanghai Gold Exchange’s AU99.99 spot gold price settled at 997.17 yuan per gram, while Shanghai Futures Exchange’s main gold futures contract closed at 999.8 yuan per gram, both setting new historical highs.
Generally, domestic gold prices are primarily influenced by international gold prices. Over the past week, international gold prices successively broke through three major psychological barriers of $4,100, $4,200, and $4,300 per ounce. On the 17th, London spot gold approached $4,380 per ounce during trading, while New York gold futures reached $4,392 per ounce, both recording weekly gains exceeding 8.4% – the largest single-week increase in recent years.
Since the beginning of this year, international spot gold prices have risen by over 66%, while renminbi-denominated spot gold prices have accumulated gains exceeding 62%. According to industry analysis, this year is expected to see the largest gold price increase since 1979.
Extending the timeline further reveals a clear trend: gold price increases have been accelerating. It took 12 years for international gold prices to rise from $1,000 to $2,000 per ounce; approximately 4 years to climb from $2,000 to $3,000 per ounce; and only slightly over 6 months to surge from $3,000 to $4,000 per ounce.
What factors are driving this bullish gold market?
Analysis suggests that in the short term, recent disclosures of loan fraud incidents at two major regional US banks have directly triggered market concerns about credit system stability, prompting continued gold investments. Additionally, the ongoing US government shutdown has provided support for gold prices.
“Gold’s rise reflects increasing investor demand for defensive assets amid economic uncertainty and geopolitical changes,” according to market analysis.
Further analysis indicates that against the backdrop of Federal Reserve interest rate cuts, gold has become a popular asset among investors due to its effectiveness during rate-cutting cycles in responding to dollar weakness and declining US Treasury yields. The medium to long-term trend of global central banks reducing dollar assets and increasing gold holdings has provided fundamental support for gold prices.
“Over the past three years, global central bank buyers have demonstrated a tendency to buy on dips, with other investors following suit,” according to market reports. Data shows that in September, global gold ETFs recorded their strongest monthly performance ever, with net inflows of $17.3 billion. Meanwhile, during September this year, the global gold market’s average daily trading volume reached $388 billion, representing a 34% month-over-month increase.
Industry experts also caution that with gold’s rapid price surge and substantial short-term gains, investors should remain aware of near-term risks. “In the long term, gold prices remain supported by factors including elevated US dollar credit risks, but any market that accumulates significant gains over a short period faces technical correction risks,” analysts note.
