On September 17 local time, the Federal Reserve announced that it would lower the target range of federal funds rate by 25 basis points. Gold prices have accelerated their rise recently, continuing to set new historical highs. Historically, interest rate cuts have led to loose liquidity and triggered a weakening of the US dollar, which is likely to catalyze the rise in gold prices.

In the long run, against the backdrop of intensified geopolitical risks, central banks in various countries have significantly increased their holdings of gold since 2022, making supply and demand relations gradually the most core factor affecting gold pricing. The current central banks’ willingness to purchase gold is still strong, and will provide stable support for gold prices in the future.

In addition, the emergence of gold stablecoins has successfully extended the demand for gold to the field of digital finance. With the continuous expansion of gold stablecoins, the incremental demand generated by related transactions has also become an important marginal force driving the rise of gold prices.