Just now, gold prices reached the "36th new high" of this year

The strong upward trend of gold continues, with its price reaching the 36th historical high of the year on Monday.

On Monday, the settlement price of December gold futures contracts on the New York Mercantile Exchange rose by $69.30, an increase of 1.9%, to $3,775.10 per ounce, marking the highest closing price ever for the main contract. According to Dow Jones Market Data, this is the thirty-sixth time this year that the gold price has set a closing record.

Since the beginning of this year, the cumulative increase in gold prices has reached about 43%, and its value has far exceeded the inflation-adjusted high of 1980, raising concerns among some investors about the sustainability of the upward trend.

However, analysts believe that geopolitical uncertainty, inflation concerns, and expectations of interest rate cuts together constitute a "perfect storm" driving gold prices upward. Despite a growing caution towards bubbles, key market indicators have not yet shown signs of panic.

"Perfect Storm" Supports Gold Fundamentals

The current macro environment is a "perfect storm" favorable for the rise of precious metals like gold.

Brett Friedman, a writer at Winhall Risk Analytics and OptionMetrics, pointed out that many view gold as "the perfect investment that appears at the perfect time," as it benefits from inflation, currency devaluation, debt, conflict, and the fear and uncertainty caused by socioeconomic anxieties. He added that for investors seeking "disaster insurance," gold is an ideal choice.

Adrian Ash, research director at BullionVault, described the current market environment as a "perfect storm" that continues to define the trends of gold and silver. He stated, "As divisions and political violence within the U.S. worsen, expectations of interest rate cuts from the Federal Reserve are combining with escalating tensions between NATO and Russia, collectively enhancing the safe-haven appeal of gold and silver."

Ash also noted that the collapse of global trust and cooperation shows no signs of weakening, and last week's significant inflow into gold ETFs indicates that "the real money flowing into precious metals has only just begun." According to FactSet data, the SPDR Gold Trust (GLD) has recorded increases for five consecutive weeks.

In addition to macro factors, the technical trends of gold are sending positive signals.

Jake Hanley, managing director and senior portfolio specialist at Teucrium, stated that the rise in gold prices on Monday does not seem to be based on any new news but is driven by a "healthy bull market" characterized by technical price behavior since September 1, supported by "growing inflation vigilance and geopolitical concerns."

Hanley further analyzed the price charts of gold, stating that they "exhibit classic breakout behavior: a long consolidation phase, a clear resistance level, a bullish trend arrangement, and strong bullish candlesticks accompanied by decisive upward movements." He added, "This indicates a high-confidence breakout, with momentum on the side of the bulls."

After the Big Surge, Has Gold Become a Bubble?

Key indicators in the options market do not show signs of irrational exuberance.

Brett Friedman points out that while identifying financial bubbles is "notoriously difficult" and often can only be confirmed in hindsight, the gold market does not seem to have entered a bubble state. He believes that gold is currently in an "aggressive and sustained bull market," rather than a bubble. He explains that if a bubble were forming, the market's implied volatility would rise due to increased uncertainty and wild price fluctuations.

Additionally, the spread between out-of-the-money options and at-the-money options has not significantly widened. Friedman states that in a bubble environment, investors flock to out-of-the-money options with lower premiums but the potential for astonishing returns, leading to an expansion of the "skew" between the two.

However, data from OptionMetrics shows that this indicator is not currently at abnormal levels. He concludes, "Financial bubbles can indeed occur, but they are very rare, and unverified assertions surrounding them should be treated with extreme skepticism."

Despite the current optimistic market sentiment, some signs still remind investors to remain vigilant.

Brett Friedman also acknowledges that there are some potential signs that gold prices "may form a bubble." These signs include the increasing presence of gold on social media and mainstream media, as well as the explosive growth of gold ETF activity.