Two Major Reasons for the Surge in Gold Prices

On the 29th local time, international gold prices rose significantly, with the December gold futures price on the New York Mercantile Exchange closing at $3,516.10 per ounce, an increase of 1.20%. Looking back at the entire month of August, the main contract price of gold futures on the New York Mercantile Exchange saw a cumulative increase of over 5%. Analysts at Bank of America pointed out two important reasons for the rise in international gold prices: first, after Federal Reserve Chairman Jerome Powell's speech on August 22 at the Jackson Hole Global Central Bank Annual Meeting, where he suggested that the Fed remains open to rate cuts even with upward risks to U.S. inflation, market expectations for a rate cut in September surged, pushing international gold prices back above $3,400 per ounce; second, the recent controversy surrounding the dismissal of Fed Governor Cook by Trump raised questions about the Fed's independence, further undermining market confidence in dollar assets, leading some investors to buy gold as a safe haven, which drove international gold prices above $3,500 per ounce in the short term. Currently, the market generally expects that the Fed may cut rates once or even twice this year, which provides overall support for commodity prices, including gold and silver. Several international financial institutions are bullish on gold prices, with UBS currently raising its target price for international gold in the first half of 2026 to $3,700 per ounce. Analysts at Bank of America expect that by the first half of 2026, international gold prices will reach a high of $4,000 per ounce