The global gold price hit a record high on Tuesday, surging more than 20% after the Federal Reserve cut interest rates by half to 0.25%.
The move capped a record-high three-month rally and boosted the value of the global gold market.
But gold traders remain cautious, and some fear the current rally could be a one-off.
“I think it’s a very small correction that’s unlikely to be sustained,” said Bill S. Bader, director of gold for Citi Gold Partners in New York.
“The fundamentals of gold are very strong and the gold price is very resilient.”
The gold market is still in a volatile phase.
The Federal Reserve is currently holding interest rates at zero, which means the market is very much in a “vacuum” — a term economists use to describe a time of relative stability.
This has caused the price of gold to spike and lead to an oversupply of the metal, which has sparked a market frenzy.
The market is now pricing gold at around $1,700 an ounce, which would make it the world’s second-most valuable asset after the US dollar.
However, analysts say the gold market’s volatility has already begun to show signs of abating.
The Fed’s announcement on Tuesday helped boost gold prices in Europe and Japan.
In the US, the dollar has rallied, which is encouraging traders.
The recent rally is expected to continue, with gold prices continuing to rise, and the Fed’s decision to raise rates in November likely to boost gold as well.
The gold price was up about 3% in Europe on Tuesday and rose nearly 10% in the Asian markets, according to data compiled by Bloomberg.
Gold was up 1.3% in Japan, up about 4% in South Korea and up about 1.5% in China.
The rally in the Japanese stock market, which was up 3.2% on Tuesday but is down by about 20% in 2015, is also helping boost gold, as is a move in gold futures prices.
Inflation in the United States was forecast to fall to a 2% annual pace in the second quarter, down from a 2.2 percent rate in June, according the Congressional Budget Office.
Gold and gold futures have rallied as more investors have begun to invest in the precious metal.
It is currently trading at about $1.2135 an ounce.
The US dollar is also surging.
The dollar index is up more than 2% against a basket of currencies, while the S&P 500 is up nearly 6% on the year.
But silver and copper prices have fallen and gold is surging.
Gold futures have soared more than 17% this year, according, as investors have bought gold, while gold futures are down about 5% in 2016.
Gold is still up about 8% this quarter, according data compiled for Bloomberg by FactSet.
Gold stocks, which are more valuable than gold, have been among the best performers in the gold ETF space.
Gold, for example, is up about 10% this week.
The rally in gold and silver prices is boosting the price-to-earnings ratio for the S-shaped S&P 500 index, which tracks the Dow Jones Industrial Average.
The S&p 500 is currently up more the S+P 500, which indexes technology stocks.
The S&pr is up 5.2%, while the Dow is up 12.4%.
Gold and silver stocks are the best performing in the S & P 500 index.
In recent weeks, gold has been outperforming the S/P 500 as investors are willing to pay more for gold, according Bloomberg.
Gold has been priced to outperform the SPSY index of technology stocks, according FactSet, which compares S&ps to SPSS.
Gold prices have rallied in 2016, which led to a rally in other asset classes as well, such as the Russell 2000 and the Vanguard 500 index of companies with high valuations.
The Russell 2000 is down almost 20% this month.