Recently, international gold prices broke through the $2,700 per ounce mark, with London spot gold reaching $2,754.01 per ounce on October 21, hitting a new record high. Since the beginning of October, London spot gold has risen by more than 3%. Here are the key factors driving the continued rise in gold prices.

Geopolitical Tensions Boosting Safe-Haven Demand

Global geopolitical tensions have been a major factor driving gold prices higher. The ongoing conflict between Russia and Ukraine, along with heightened tensions in the Middle East and the Korean Peninsula, have led global investors to seek safe-haven assets. Gold, being one of the most recognized safe-haven investments worldwide, has attracted significant demand from investors.

Inflation Expectations and the Federal Reserve's Monetary Policy

Another key factor is the inflation outlook and the Federal Reserve’s monetary policy. In September, the Fed signaled a potential rate cut of 50 basis points, though the market had expected a larger cut. While U.S. economic data has shown signs of stabilization, inflation expectations have eased somewhat, but the Fed's rate cut outlook still supports gold prices. Additionally, macroeconomic policies in major economies such as China have driven inflation expectations higher, further boosting demand for gold.

Increased Global Investment in Gold

With rising uncertainty in global financial markets, investors have been shifting their funds toward gold-backed ETFs. According to the World Gold Council, global gold ETFs saw their fifth consecutive month of net inflows in September, with total holdings reaching 3,200 tons. As risk sentiment increases, investor demand for gold has continued to rise, pushing prices higher.

Outlook

Overall, gold still has room for further price increases in the future. Investors should closely monitor global geopolitical developments, Federal Reserve monetary policy, and global inflation data to determine whether gold remains a valuable safe-haven asset for the long term.