1. COVID-19 epidemic: The COVID-19 epidemic has caused great economic uncertainty, so investors seek safe and protected assets, such as gold. The epidemic has disrupted the global supply chain, led to a large number of unemployment and business failures, and triggered a global economic downturn. Therefore, investors regard gold as a way to protect wealth and hedge economic uncertainty.
2. Central Bank Policy: The policies of the central bank, especially those of the Federal Reserve, also contribute to the rebound of gold. During the epidemic, the central bank has been lowering interest rates and implementing a monetary stimulus plan to support the economy. These policies have led to the weakening of the dollar, making it cheaper for buyers in other currencies to buy gold.
3. Inflation concerns: Inflation concerns have also pushed up the price of gold. The large-scale monetary stimulus plan implemented by the central bank in response to the epidemic has raised concerns about future inflation. Gold is considered as a tool against inflation, because it can preserve its value when paper money depreciates.
4. Geopolitical tensions: Geopolitical tensions, such as Russia-Ukraine tensions, the US-China trade war and the US-Iran tensions, also pushed up the price of gold. When the geopolitical situation is tense, investors tend to invest their money in safe-haven assets such as gold.
5. Low interest rate: Low interest rate also played a role in the rise of gold. As interest rates hit a record low, the opportunity cost of holding gold decreased. This means that investors are more likely to hold gold because they won't lose much interest income.
It should be noted that the rise of gold may not last long. The factors leading to the rally may change or reverse, which will lead to the fall of gold prices. Whether it is a good time to buy gold now depends on many factors, including your financial situation, investment objectives, risk tolerance and current market conditions. It is very important to do research and consult financial advisers before making any investment decision. Generally speaking, gold can be a good choice for investors seeking safe haven assets and inflation hedging. However, like any investment, gold also has risks, and its value may fluctuate according to various factors such as market conditions, global events and economic policies. Therefore, it is very important to consider all these factors before making investment decisions.