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Interface News reporter | Hou Ruining

The international gold price broke through the $2,500 mark.

Wind stock data shows that on the morning of August 1, the price of gold futures contracts on the New York Mercantile Exchange (COMEX) once exceeded $2,500 per ounce, reaching $2,502.8 per ounce, setting a record high. As of around 11:57 this morning, its price was $2,487 per ounce.

The A-share prices of mining companies in the upstream of the gold industry chain rose.Shanjin International(000975.SZ) rose 1.52% to 18.05 yuan per share;Hengbang Shares(002237.SZ) rose 1.52% to 11.39 yuan per share;China Gold(600489.SH) rose 1.12% to 16.24 yuan per share.

The A-share price of gold jewelry sales companies fell. At the close of the morning of August 1,Zhou Dasheng(002867.SZ) fell 4.29% to 11.60 yuan per share,Lao Feng Xiang(600612.SH) fell 2.94% to 50.86 yuan per share,Chow Tai Fook(002345.SZ) fell 2.25% to 4.34 yuan per share,Yuyuan Group(600655.SH) fell 1.65% to 5.37 yuan per share.

Gold has both commodity and financial attributes, and is also a symbol of assets. Its price is affected by multiple factors, such as supply and demand, international geopolitics, interest rates and monetary policies of major European and American countries, inflation and real interest rates in the United States, increases and decreases in gold reserves by central banks of various countries, increases and decreases in gold mining costs, international fund holdings, and investors' psychological expectations.

The U.S. Federal Reserve (Fed) hinted at a rate cut as early as September, which is one of the main reasons for the rise in international gold prices.

On July 31, the Federal Reserve announced that it would maintain the target range of the federal funds rate at 5.25%-5.5%, in line with market expectations. This is the eighth consecutive time since September 2023 that the Federal Reserve has maintained this interest rate range unchanged.

But Federal Reserve Chairman Powell said at a subsequent press conference that the Fed's two major goals of "maintaining employment" and "stabilizing prices" have made considerable progress in the past two years. The broad view among officials is that the US economy "is approaching the right time for interest rate cuts" and if the standards are met, the discussion of lowering the policy interest rate may be held as early as the September meeting.

The escalation of geopolitical conflicts in the Middle East is another factor contributing to the rise in international gold prices.

On July 31, Iran's Islamic Revolutionary Guard Corps and the Palestinian Islamic Resistance Movement (Hamas) issued separate statements confirming that Ismail Haniyeh, the leader of the Hamas Political Bureau, was killed in an attack in Tehran, the capital of Iran. He had led the ceasefire negotiations between Hamas and Israel since the current round of Israeli-Palestinian conflict.

Hamas has accused Israel of assassinating Haniyeh, a day after an Israeli airstrike killed Fuad Shukur, a senior military commander of Hezbollah, in Beirut, the capital of Lebanon.

In the long run, the international gold price will continue to grow for a long time.

The World Gold Council released a report in June this year stating that there are three main reasons for holding gold, namely its long-term value, its performance during crises and its role in effectively diversifying investment portfolios. Foreign exchange reserve management agencies of various countries hope to reduce risks through gold and prepare for further political and economic uncertainties in the world.

Citibank also analyzed that the proportion of investment demand to gold mining supply is the main driving factor for gold pricing. In the past two years, the central bank's investment demand has continued to increase, accounting for the majority of mine supply, pushing gold prices higher. It is expected that the central bank's gold purchases in the future will support the gold price to stand at US$2,700-3,000 per ounce in 2025.

From a fundamental perspective, global gold supply and demand is currently in a tight balance.

On July 30, the World Gold Council released the "Global Gold Demand Trends Report" for the second quarter of 2024, showing that the total global gold demand, including over-the-counter transactions, reached 1,258 tons during the period, a year-on-year increase of 4%. This is the strongest second quarter demand since the statistics were collected.

In the second quarter, the total global gold supply reached 1,258 tons, a year-on-year increase of 4%. Among them, gold mine output increased to 929 tons, and the total amount of recycled gold reached 335 tons.