An economic expert's prophecy about the future price of gold has caused a stir online.

He predicts that by 2025, the price of gold will double to $5,000 per ounce, which means that within three years, calculated from the current price of less than $1,900, it will rise by more than 2.5 times.

This is great news, isn't it? Buying gold now would seem like a sure profit, right?

01, Rising gold prices are bad news

Not necessarily.

If this expert's prophecy comes true, it would mean that within just three years, the global market economy would sink into quicksand, struggling to recover.

As we all know, the United States has been continuously raising interest rates, and in the past two years, the U.S. has also begun to suffer the backlash. The U.S. economic edifice is visibly crumbling at a high speed, an economic storm is devouring the U.S. economy, and the U.S. dollar is also depreciating all the way.

Gold is a hedge against inflation, and in recent years, as the global economy has fallen into inflation, the price of gold has also increased significantly. Since 2020, U.S. inflation has risen from 1.3% to 9.1% in the middle of last year, and the price of gold reached nearly $2,100 at its peak.

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Moreover, gold is also a traditional safe-haven asset. Last year, when the conflict in Europe erupted, we clearly saw the price of gold rise rapidly.

In the future, due to various instabilities in the global economy, it is very likely to trigger new geopolitical conflicts, so the safe-haven function of gold will be demonstrated once again.Therefore, from whichever perspective one examines it, the rise in the price of gold signifies that there are significant issues within the global economy.

02. International Influencing Factors

In fact, last year, with the sustained high-intensity interest rate hikes by the United States, the price of gold continued to decline for the first nine months, but after September, the price of gold began to rebound.

This is likely because the market has been closely monitoring the dynamics of the Federal Reserve's continuous interest rate hikes. Currently, it is anticipated that the Federal Reserve cannot keep raising interest rates indefinitely, and the U.S. economy has also suffered a backlash. The Federal Reserve will likely implement certain countermeasures, and it is very possible that they will begin a gradual interest rate reduction process this year or next year.

Once the Federal Reserve starts to lower interest rates, the U.S. dollar will continuously depreciate, and the price of gold will start to rise steadily.

From past experiences, the U.S. Dollar Index and the price of gold have always moved in opposite directions. This conclusion implies that once the U.S. dollar begins to falter, gold will start to climb.

Of course, if that's all there is to it, one can only say that gold will rise in the future. To truly rise from the current price to $5,000, many unexpected factors would still be needed to support such a surge.

03. Timing for Purchase

Regardless, gold products are highly favored, and the enthusiasm for buying gold is growing increasingly strong.

Domestically, for thousands of years, people have openly expressed their fondness for gold jewelry, and during the Spring Festival, many people have a demand for purchasing gold ornaments.Domestic citizens are also quite concerned about the price of gold. Over the past two months, the price of gold has soared, with gold jewelry almost all exceeding 555 yuan per gram.

However, after the Spring Festival ended, the price of gold began to trend downward, with a drop of about 20 yuan per gram.

Generally speaking, the Spring Festival period is the peak season for gold sales. Around July and August each year, the price of gold will be much more favorable.

However, the main trend of gold prices is still influenced by the global gold futures prices. At present, the extent of interest rate hikes in the United States is the most significant influencing factor. If people want to invest, it is very necessary to pay attention to this point.