The recent surge in gold prices has captivated investors and the general public alike, much like the excitement surrounding hit films during the festive seasonOne particularly notable example is the collaboration between a well-known gold brand and the popular animated character NezhaThis collaboration, which debuted five years ago, has reignited interest as consumers scramble to purchase Nezha-themed gold bracelets, described by some as a "wealth myth." The burgeoning market for these bracelets has left early adopters feeling quite fortunate, as their investment has seen significant returns amidst the rising trend of gold prices.

As we approach the Lunar New Year, a critical period for gold purchasing influenced by cultural traditions and festivities, recent observations across various markets in major cities such as Beijing and Qingdao reveal a noticeable uptick in gold jewelry prices, consistently nearing 800 RMB per gram despite fluctuating commodity marketsThe increasing gold prices seem to have done little to deter consumers, fueled by both traditional purchasing habits during the holiday and an overall bullish sentiment towards gold as an investment.

As of February 11, gold prices reached a historic peak, with spot gold in London surpassing $2900 per ounce and COMEX futures even touching $2968 within a trading sessionSince the beginning of the year, both the spot and futures markets for gold have seen gains exceeding 10%, all while 2024 saw international gold prices break records on 40 separate occasions, reflecting a substantial 26% increase against the dollar.

But what is driving this steep ascent in gold prices? Is this a sustainable trend, or should investors brace themselves for potential risks? These pressing questions prompted discussions with industry expertsNotably, many insiders caution that the trajectory for gold pricing suggests it might face a phase of stability at high levels starting in 2025, indicating that current conditions are fraught with risk for those eager to jump into the rising market.

Several factors contribute to gold's rapid price escalation, with its appeal as a safe haven during turbulent times emerging as a primary reason

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Despite ongoing skepticism from some analysts, the interest in gold as an investment has surgedAccording to the World Gold Council, global inflows into physical gold ETFs added a notable $3 billion in January alone, pushing total assets under management in the sector to a record $294 billion, along with a 34-ton increase in holdingsDaily trading volume for gold globally in January reached an average of $264 billion, marking a 20% increase month-over-month.

Industry insights from Wen Bin, Chief Economist at China Minsheng Bank, affirm that the current gold bull market can be traced back to October 2022. Since then, the acceleration in prices has been pronounced, culminating in a remarkable growth of 26.6%, representing the highest annual increase in nearly 14 yearsThis climate of rising prices can be linked to several interconnected factors: uncertainty stemming from U.S. tariff policies, volatility in American stock markets reinforcing gold's traditional role as a hedge, and plummeting yields on U.S. treasury bonds, which decrease the opportunity cost of holding gold.

Qu Rui, Deputy Director of Research and Development at Dongfang Jinceng, further elaborates on the factors fueling gold's upward trajectory in 2024. The rise in geopolitical tensions globally and the unpredictable nature of U.S. domestic policies have bolstered demand for asset safety, prompting a market-wide shift towards gold purchasing to counter currency riskAdditionally, the countdown to a potential interest rate decrease by the U.SFederal Reserve due to persistent inflation presents further support for gold prices.

Looking ahead, a pressing question remains: Will gold continue its upward momentum throughout 2025? Many experts argue that there is a favorable environment for gold, with possibilities for further spikes amidst anticipated high volatilityRecently, UBS raised its price forecast for gold to $3000 per ounce over the next twelve months, suggesting that ongoing global uncertainties, an extended cycle of interest rate cuts, and robust demand from both investors and central banks will provide continuous support.

But the market does not lack cautionary tones

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