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cailianshe news, september 24 (edited by zhao hao)in the early european trading session on tuesday (september 24), the spot gold price rose by more than $10 in the short term, briefly breaking through the 2,640 mark, reaching a high of $2,640.15 per ounce, setting a new historical high.

spot gold time-sharing chart

as of press time, the spot gold price has fallen slightly to $2,629 per ounce, up more than 27% year-to-date, outperforming the s&p and nasdaq, which have risen by nearly 20%. at the same time, the main contract price of comex gold futures also set a historical record, with the highest intraday price at $2,664.6 per ounce.

ubs analysts wrote in a report released on monday that gold prices can continue to shine despite record highs. "while record high prices may deter some investors, we see several reasons why gold still has room to run higher."

source: ubs official website

the first reason mentioned in the report is that the federal reserve will further relax its policy. on the same day, several federal reserve officials also confirmed to the outside world that there may be more opportunities for interest rate cuts in the future, and pointed out that the current policy interest rate still has great pressure on the us economy.

last week, the federal reserve lowered the target range of the federal funds rate by 50 basis points to between 4.75% and 5%. the published "dot plot" shows that the 19 policymakers as a whole believe that by the end of the year, there will be another cumulative interest rate cut of 50 basis points from the current level.

chicago fed president goolsbee said, "we have a long way to go in getting interest rates close to neutral levels over the next 12 months." minneapolis fed president kashkari expects the bank to cut interest rates by 25 basis points at each of the remaining two interest rate meetings this year.

the cme's "fedwatch" tool shows that the market expects the central bank to have an equal chance of cutting interest rates by 25 basis points and 50 basis points at its november meeting; the market also expects the bank to cut interest rates by a cumulative 75 basis points from the current level by the end of the year, which is much more dovish than the dot plot.

in terms of data, the initial value of the u.s. manufacturing pmi for september released by s&p global on monday was lower than expected, indicating that the contraction of the manufacturing industry may further expand. later this week, the united states will release personal consumption data, which will include the pce (personal consumption expenditure) inflation data that the fed values ​​most.

the ubs report commented that the fed's monetary easing shift has reduced the opportunity cost of investors holding non-yielding assets such as gold, increasing people's enthusiasm for this precious metal. "as cash returns are eroded by a lower interest rate environment, more funds may eventually turn to assets such as gold."

the second reason given by ubs is that "geopolitical tensions are worsening": the middle east conflict and the russian-ukrainian conflict have not yet been resolved, which has strengthened the necessity of gold as a geopolitical hedging tool. last week, ukraine attacked two russian ammunition depots.

yesterday, the israel defense forces announced that they had launched a large-scale attack on hezbollah targets in lebanon. the lebanese ministry of public health issued a statement saying that israel's continued air strikes on many parts of lebanon have killed 492 people and injured 1,645 people.

ubs also mentioned that demand for gold from investors and central banks remains strong, “official purchases now account for about a quarter of total gold demand, about double the level before 2022. investor demand through etfs also looks set to pick up pace as the fed’s rate cuts take hold.”

"despite the higher gold prices, we believe that gold's hedging properties remain attractive," ubs wrote in conclusion. "therefore, we continue to view gold as the best investment in our global strategy, targeting $2,700/oz by mid-2025."