I. Who's Behind the Surge in Gold Prices?

To understand why gold prices have gone so wild, we must start with last night's U.S. CPI data. The data showed that the U.S. CPI rose by 2.4% year-on-year in September, higher than the market's expected 2.3%; the core CPI rose even more, by 3.3% year-on-year, not only exceeding expectations but also slightly higher than the previous value. As soon as these numbers came out, the market immediately went into a frenzy! Everyone knows that CPI is an important indicator for measuring inflation. A high CPI means greater pressure on rising prices, and the money in hand becomes less valuable. As a result, everyone turned their attention to gold, the "safe-haven asset," thinking about buying some gold to calm their nerves.

Furthermore, the number of initial jobless claims in the U.S. for the week ending October 5 also hit a new high, with 258,000 people, significantly more than the expected 230,000. With this increase in unemployment rate, economic pressure grows, and uncertainty about the future increases. Therefore, gold has become everyone's "favorite," and its price naturally rises with the tide.

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II. The Catalyst for the Gold Price Surge: The Federal Reserve's Interest Rate Cut Expectations?

When it comes to the catalyst for the surge in gold prices, it must be the expectations of a Federal Reserve interest rate cut. Traders are now very confident that the Federal Reserve will cut rates by 25 basis points in November. According to the CME "FedWatch," the probability of a 25 basis point cut in November has already reached a high of 86.9%! As soon as this news came out, the gold market acted as if it had been injected with a stimulant, with prices soaring upwards.

However, the voices within the Federal Reserve are not all in agreement. For example, Bostic is open to not cutting rates in November; while Goolsbee and Barkin believe that inflation has significantly decreased and are increasingly confident that inflation is under control. But this does not affect the market's speculation on rate cut expectations. After all, as long as there is the slightest hint of a rate cut, gold can take advantage and soar.

III. The Future of Gold Prices: Will the Party Continue or Return to Rationality?

Seeing gold prices skyrocket, many people are tempted, wondering whether they should also follow the trend and buy some. But we must be rational and not just look at the immediate benefits. When it comes to the future direction of gold prices, we need to look at several key factors.Firstly, one must pay attention to the U.S. Producer Price Index (PPI) data for September. The PPI is a crucial indicator of changes in producer prices. If it rises, it implies that production costs have increased, which could potentially lead to a rise in consumer prices. Consequently, the demand for gold as a safe-haven asset might increase as well.

Secondly, it's important to keep an eye on speeches by Federal Reserve officials and news related to geopolitical situations. If the Fed hints at more rate cuts, gold prices are likely to rise further. Similarly, if geopolitical tensions escalate, gold's position as a safe-haven asset becomes more secure.

However, we must also recognize the risks behind the gold price rally. After all, gold prices have already reached such high levels. If market sentiment shifts or negative news emerges, gold prices could experience a correction. Therefore, we must act with caution and not let short-term gains blind us.

Of course, some experts are optimistic about the future of gold. For instance, analysts at UBS Group predict that by mid-2025, the price of gold will reach $2850 per ounce! If this forecast comes true, it would indeed be a feast for gold enthusiasts.

Are you ready for the gold price rally?

Seeing the continuous surge in gold prices, are you tempted? However, we must remain rational and not let the market's fervor cloud our judgment. After all, investing carries risks, and entering the market requires caution. Behind the gold price rally, there are also many hidden risks and uncertainties. Therefore, we must make wise choices based on our own risk tolerance and investment objectives.