In the past 1 years, investing in gold was sometimes like a business that only earned money. Since 21, the price of gold has been rising every year, with an average annual increase of 18%.

however, this situation is being challenged this year. Bank analysts, usually gold bulls, predicted that the price of gold would rise to a record level, but also warned that according to the newly formed knowledge, 211 may be the year when the price of gold will peak.

This expectation is based on the view that the momentum of the US economic recovery will begin to increase, which will force the Federal Reserve to tighten monetary policy and make the yields of bonds and stocks more attractive.

"With the gradual improvement of the economy, the real interest rate will rise, which will limit the rise of gold prices," said David, an analyst at Goldman Sachs in new york. Grilli said, "We believe that it is prudent for gold investors to start preparing for the gold price to peak."

Many analysts regard the change of market sentiment since the beginning of January as a harbinger of the prospect of the gold market. As investors are more and more confident about the economic prospects of the United States and less worried about the financial problems in the euro zone, funds have flowed into the stock market and bond yields are also rising.

gold, a traditional hedge against economic uncertainty, has been dragged down. The hot market that ran through the second half of 21 and was based on the fear of a double-dip recession has subsided. Some investors have begun to take profits.

last year, the price of gold rose by 3%, hitting a record nominal peak of $1,43.95 per ounce in mid-December, but since then it has fallen by 7.5%, and this week it has fallen to a three-month low of $1,322.7 per ounce.

Bankers said that the drop in gold prices reflected the profit-taking behavior of short-term traders, rather than the massive withdrawal of investors. In fact, almost all traders and analysts believe that the price of gold will set a new record this year. According to a survey conducted by the London Bullion Market Association, the respondents' predictions for the new high of gold price ranged from $1,55 to $1,85 per ounce.

Despite this, many people have warned that the period of rising gold prices has come to an end. In addition to Goldman Sachs, other institutions, including UBS, Credit Suisse, Barclays Capital, Macquarie and precious metal consulting firm GFMS, also predict that gold prices will peak at the end of this year or next year.

Tom, precious metals analyst at Credit Suisse? Tom Kendall said: "In the second half of this year, we will see such a situation: people have adjusted the market drivers they are concerned about, and the stimulus of ultra-low interest rates in the United States to gold prices has gradually disappeared."

investors have begun to pay attention to these warnings. According to the Commodity Futures Trading Commission (CFTC), the number of speculative positions betting on lower gold prices in the US futures market rose to the highest level since mid-25 last week. On the whole, investors are still bullish on gold prices, but their position allocation reflects that their bullish degree is the lowest since July 29.

those investors who invest in gold ETFs have also reduced their positions accordingly. In the past five years, the gold ETF has attracted massive capital inflows, which has played a certain role in pushing up the price of gold. ——SPDR Gold Shares, the largest fund of this kind, suffered the largest capital outflow in its six-year history on Tuesday, which reduced its gold holdings to the lowest level since May last year.

grilli of Goldman Sachs said that investors have started to protect themselves from the impact of falling gold prices by buying put options, so that they can limit their losses in case of market correction. Kendall added that "one or two" hedge funds had "started to consider long-term exit strategies".

"The initial sell-off may be drastic," grilli said, "but we don't think it will be as drastic as it was in the late 197s and early 198s."

few strategists recommend shorting gold now. Due to the significant increase in inflation in Asia, the demand for gold from this region rose sharply in the first week of the new year. In addition, central banks have stopped selling gold reserves and become important buyers of gold.

In addition, some investors believe that the United States will face high inflation in the longer term. They argue that the Fed will not be able to successfully withdraw from its "quantitative easing" policy. Due to high inflation, even if the nominal interest rate is raised, the real interest rate will remain low. In this case, investors are likely to continue to invest their money in gold.

Philip from p>GFMS? Klapp Klapwijk said that, similarly, if the scope of sovereign debt crisis in the euro zone expands, the upward trend of gold price may continue. Some people think that debt-ridden American States may trigger new financial turmoil.

"The market is beginning to think that the global economy can easily get rid of its dependence on cheap funds," said Daniel of Deutsche Bank. Daniel Brebner said, "We don't fully agree with this view."

the root cause of this wave of gold rally so far is the frequent emergence of new, unexpected and destabilizing risks in the economy. The factors that may cause unrest still exist at present.