Gold Prices Surge to Record Highs Amidst Global Uncertainty
Recent trading on the New York Mercantile Exchange (COMEX) saw gold prices reach a new peak of US$4,061.2 per ounce, accompanied by robust trading activity exceeding 100,000 lots and an open interest nearing 400,000 lots. This surge occurred during China‘s “double Festival” period and reflects growing risk aversion in overseas markets.
According to Fan Rui, a senior researcher at Guoyuan Futures precious metals, the temporary “suspension” of the US federal government and the resulting delay in economic data releases have fueled this increased risk aversion. Consequently, international gold prices have remained consistently above US$4,000 per ounce. While the record high is largely attributed to short-term anxieties, analysts caution that a price correction is increasingly likely once thes sentiments subside. However, long-term prospects for gold remain positive, driven by expectations of a decline in the US dollar’s credibility and purchasing power.
Throughout the domestic “Double Festivals,” overseas markets experienced important volatility, with international gold futures demonstrating a strong upward trend. The COMEX gold December contract closed positively for several consecutive sessions, reaching $4,060/ounce by October 8th. London spot gold prices also maintained stability above the $4,000/ounce mark.
Xia Yingying, head of the Nanhua futures Precious Metals New Energy Research Group, explained that the sharp rise in international precious metal prices, including a 13-year high for COMEX silver futures, is primarily due to heightened safe-haven demand and increased asset allocation driven by the simultaneous presence of inflation and economic risks. The US federal government “shutdown” is a significant contributing factor. While continued strong performance is anticipated,Xia Yingying also noted the potential for a pullback following the rapid gains,with profit-taking by some investors potentially triggering price adjustments.
This international gold price strength has directly impacted domestic gold assets. The main gold futures contract on the Shanghai Futures Exchange hit a record high of 880 yuan/gram on September 30th – the highest since its listing. Shanghai Wenhua Finance Data Co., Ltd. data reveals that funds deposited in gold futures reached nearly 130 billion yuan on that day, with a net inflow of almost 20 billion yuan.
Gold-themed funds are also experiencing substantial growth and delivering remarkable returns. Wind information data shows the total assets under management for 53 gold-themed funds reached 246.9 billion yuan as of October 8th, an increase of nearly 130 billion yuan as the beginning of the year. Several funds now manage over 10 billion yuan, with Huaan Gold ETF leading the way at nearly 60 billion yuan – a gain of over 31 billion yuan year-to-date. Many of these products have seen net value growth rates exceeding 80% this year.
Analysts attribute the strong performance of gold-themed funds to a combination of factors, including the macroeconomic environment in overseas markets, increased risk aversion, and shifting expectations regarding monetary policy. Investors are advised to understand the safe-haven, anti-inflation, and value-added characteristics of gold assets and to select appropriate financial products based on their individual risk tolerance and investment goals.
