According to the financial news on November 22 (Reporter Wang Hong), the phenomenon of the usd strengthening and suppressing gold prices has become a thing of the past. After ending a "six consecutive declines," gold prices have risen for five days in a row, reaching $2,700 per ounce in spot gold today, with a daily increase of 1.15%. Experts say that today's rise in gold prices is mainly due to increased geopolitical conflicts and institutional investors buying on dips, driving up demand. On November 21, the global largest icbccs gold etf holdings increased by 8.04 tons to 877.97 tons compared to November 15.

Meanwhile, the usd index is also rising, breaking through 108 today, with a daily increase of nearly 1%. Experts say that the rise in the usd index is primarily driven by cooling expectations for rate cuts from the Federal Reserve, the unfolding of "Trump 2.0 policies," and heightened geopolitical conflicts. Today's rise in the usd index and gold is mainly due to significantly increased market demand for safe-haven assets caused by escalated geopolitical risks, thereby weakening the usd's pressure on gold.

Geopolitical conflicts and institutions buying on dips are driving gold prices higher once again.

On November 22, spot gold rose by 1.15% during the day, reaching $2,700 per ounce, the highest level since November 9; and gold prices have risen for five consecutive days, increasing by over 5% this week.

Qiu Rui, deputy director of the Research and Development Department of Dongfang Jincheng, told financial news reporters that today's rise in gold prices is due to heightened geopolitical conflicts. In the short term, there is a risk of escalating geopolitical conflicts, which leads to a surge in market demand for safe havens, thereby driving up gold prices and breaking through $2,700 per ounce.

Institutional investors actively buying on dips is also one of the reasons for the rise in gold prices. "From the institutional perspective, gold prices have dropped significantly recently, adjusting to the average level seen in September last Friday. Considering the overall positive impact of future policies implemented by Trump on gold, gold still holds long-term allocation value, and institutional investors are actively buying on dips," Qiu Rui added.

Data shows that this week, the holdings of the global largest icbccs gold etf continued to rise, with holdings on November 21 increasing by 8.04 tons to 877.97 tons compared to November 15.

Notably, on November 15, COMEX gold futures closed at 2567.4 usd per ounce, hitting a low not seen in nearly two months. From November 8 to November 15, during six trading days, international gold prices experienced a "six consecutive declines". The outflow from gold ETFs is one reason for the decline in gold prices. According to the World Gold Council, in the first week of November, it is estimated that about 0.809 billion usd (12 tons) flowed out of global gold ETFs. In addition, net holdings on COMEX also decreased by 8% (74 tons) from the previous week.

"The current rebound in gold prices mainly stems from geopolitical risk, particularly related to the recent escalation of the Russia-Ukraine conflict. Observations indicate that the rhythm of gold prices is highly consistent with that of the Russia-Ukraine conflict; whenever tensions escalate, gold prices rise," said Zhao Qingming, deputy director of the Institute of Finance Studies, in an interview with the Financial Alliance.

The usd index broke through 108, and gold is less affected by the trend of the usd index.

While gold prices continue to rise, the usd index is also setting new records. At 17:15 today, the usd index rapidly rose and broke through 108, increasing nearly 1% within the day, reaching a two-year high.

According to analysis by Qu Rui, today's increase in the usd index is attributed to the following reasons: first, there is some disagreement among Federal Reserve officials regarding whether to continue cutting interest rates, causing market expectations for rate cuts to cool, thereby driving up the usd index; second, the "Trump 2.0 policy" trades are still fermenting, providing certain support for the usd index; third, as the world's primary reserve currency with strong liquidity, the usd also has safe-haven attributes. The sudden further escalation of geopolitical risks has led to an increase in demand for dollars from investors.

In fact, the usd index and gold generally exhibit a seesaw relationship; as one rises, the other typically falls. This is because the usd index reflects the relative strength and weakness of the dollar in the international currency market. When the usd index strengthens, it means the dollar appreciates relative to other major currencies, which usually makes gold, priced in usd, more expensive, thus suppressing demand for gold and leading to lower gold prices. Conversely, when the usd index weakens and the dollar depreciates, gold prices often rise.

However, market risk appetite can also affect the relationship between the usd index and gold. During times of geopolitical tension, investors seek gold as a safe-haven asset; even if the usd index rises, gold prices may also increase due to safe-haven demand.

"Recently, the influence of us treasury yields and dollar movements on gold has been decreasing," noted the World Gold Council, analyzing that most of the returns on gold during October and much of 2024 are generated during trading hours in Asia. Some of this bid may be related to "sanction" measures, but central bank purchases of gold have slowed in the third quarter, which may also be investor-driven. Currently, Trump’s tariff policy may put more pressure on Asian stock markets. The weakness of the csi 300 index is a significant factor promoting robust gold investment demand in China for 2024.

According to Qu Rui, the simultaneous rise of the usd and gold today is mainly due to the noticeable increase in geopolitical risks, which significantly boosts market demand for safe-haven assets, thereby weakening the usd's suppression of gold.