The Fed's interest rate cut will lead to an increase in working capital and bring some inflation concerns. At this time, due to the demand for value preservation, the demand for gold will increase and the price will rise. At the same time, interest rate reduction is a loose monetary policy, which will increase the liquidity in society. In order to pursue greater returns, this part of the funds will increase investment in gold, thus pushing up the price of gold.

In addition, the following factors will also affect the rise and fall of gold prices:

1, the relationship between supply and demand

When the market demand for gold is large, but the supply is less than the demand, it may cause the price of gold to rise, and conversely, when the supply is greater than the demand, it will cause the price to fall.

2. In times of international turmoil or war.

As a hard currency, gold has the functions of preserving value and avoiding risks. During the international situation shock or war, residents lack confidence in their own currency and buy gold in large quantities, thus stimulating the price of gold to rise.