Gold prices are rising rapidly, "going back and forth" to the record peak of 40 million/tael, why?

Expecting a Fed rate cut, the IMF commented that the USD is being overvalued, tensions in the Middle East have weakened the USD, prompting investors to seek gold as a safe haven.

The main reason for gold prices to increase for 2 consecutive weeks is market expectations that the US Federal Reserve (Fed) will cut interest rates before early August. Gold is currently trading in the range of $1,400.

comments from the Chairman of the US Federal Reserve (Fed) in New York, John Williams, almost admitted that the Fed will cut interest rates at the end of July, thereby weakening the USD and bond yields. Both market conditions are seen as supportive of gold's rally.

Spot gold prices are trading at $1,428.85 an ounce. Gold for August counterpart delivery is currently at 1,426.70 USD/ounce, down 1.40 USD compared to the previous session.

Despite the lower-than-expected US housing data, gold prices have risen 0.6% over the past week.

US President Donald Trump has recently repeatedly criticized the Fed for keeping the USD high. On Twitter, the US President compared the FED to a "young stout", while the US needs to cut and loosen interest rates, the FED creates what countries are using to fight against Washington.

The Fed "didn't know what it was doing" and raised interest rates too quickly, he said. The US president said that without the Fed's moves, the US economy could grow by 4 or 5% annually while the Dow Jones Industrial Park would increase by thousands of points.

However, Fed Chairman Jerome Powell has repeatedly ignored Mr. Donal Trump's attacks because the Fed is an independent agency and does not need to deal with short-term political pressure. Investors are increasingly confident that the Fed will cut the most 25 basis points by the end of July and continue to cut another 50 basis points at the policy meeting in September.

Another reason supporting gold's price increase is the recent assessment of the International Monetary Fund (IMF) on the USD. The IMF said the USD has been valued at 6-12% based on short-term economic principles. Meanwhile, the Japanese yen, Chinese yuan and Euro are said to be in line with the fundamentals.

Central banks around the world are increasingly dovish in loosening monetary policy to increase the value of bonds.

The European Central Bank is expected to show signs of easing next week. The Central banks of South Korea and South Africa have signaled monetary easing since the end of last week.

Another factor driving gold prices to a 6-year peak is instability in the Middle East. US officials said the US Navy ship "destroyed" an Iranian drone in the Strait of Hormuz. The incident followed the seizure of an Iranian tanker also in this Strait. Escalating tensions have led investors to seek gold as a safe haven.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, raised its gold reserves to 814.62 tonnes (up 1.42% in just one day).