Chinanews client Beijing March 26 (Peng Jingru) After experiencing a sharp pullback for eight trading days, the price of gold has recently begun to swell, rising for three consecutive days, almost regaining its previous lost ground.
On March 24, COMEX gold futures rose 6.03% to close at 1667.5 US dollars per ounce, the highest reported at 1693.5 US dollars per ounce, the highest sprint in the past 7 years.
Data map: Taiyuan, Shanxi, gold bars displayed in a gold shop. Photo by Zhang Yun
3 days to regain the "position" of the 8-day plunge
On March 20, due to the plunge of U.S. stocks and other factors, international gold prices began to rise under the need for risk aversion. On March 23, after the Federal Reserve announced the opening of unlimited quantitative easing (QE), from March 23 to 24, the price of gold continued to rise. On the 24th, COMEX gold rose as high as 6.47%, and the intraday maximum was $ 1693.5 / ounce It is only one step away from the recent high of 7 years.
The international gold price is higher. How about the price of gold commodities sold in the domestic market?
On the 25th, Chinese gold data showed that investment gold bars were 380.3 yuan / gram; ordinary craft gold bars were 390.3 yuan / gram; high-end craft gold bars were quoted at 478 yuan / gram. Its flagship store staff said that there were no investment gold bars. On the 25th, Pudong Development Bank ’s gold investment gold bar price was 372.5 yuan / gram.
Jewellery brands have increased prices. Chow Tai Fook's quotation ended at 15:44 on the 25th, and the price of the gold inquired was 475 yuan / gram; the staff of Chow Sang Sang said that according to the gold price on March 20, it was 431 yuan / gram. However, the current investment gold sequins and other products in the two stores have preferential activities based on this price.
It is worth noting that on the 18th (last Wednesday), the price of gold has just experienced a plunge, falling from a high point of around 1,700 US dollars per ounce to 1,450 US dollars per ounce, and the volatility has increased significantly. The intraday fluctuation often reaches about 100 US dollars.
Data Map: Taiyuan, Shanxi, a staff shop, employees display gold jewelry. China News Agency reporter Zhang Yunshe
With such a large fluctuation, the risk aversion properties of gold have failed?
"This week's surge in gold recovered the previous decline, mainly because the Federal Reserve launched an unprecedented unlimited monetary easing policy, effectively alleviating the market liquidity crisis, the logical return of global liquidity easing, and providing momentum for the strengthening of precious metals." SDIC Anxin Futures Research Che Hongyun, chief analyst of the Institute of Nonferrous Metals, said.
However, some investors are not optimistic about the safe-haven nature of gold. "Asset prices are so crashing now, what gold to buy, and gold in troubled times are all historical financial experiences." Mr. Sun believes that now is not the time to invest in gold, liquidity will make up for the major gaps, and will not get together for gold. " This thing is not resistant to epidemics, and it is a thing without interest. "
From the perspective of the World Gold Council, like most asset classes, gold has also been affected by unprecedented economic and financial market conditions worldwide.
"The slowdown in economic growth will undoubtedly affect the demand for gold consumption, and the volatility of gold may continue to be high." The latest report released by the World Gold Council on the 20th is expected, but high risks coupled with generally negative real interest rates and more quantitative measures by central banks The easing policy will support the investment demand for gold as a safe-haven asset.
Data map: In 2016, Osaka, Japan, Takashimaya Department Store held a gold exhibition. The picture shows a gold pot worth 43.2 million yen in the production of takoyaki. Image source: Visual China
Physical gold is in short supply, why?
At the same time as the price of gold futures soared, the gold market experienced a very rare liquidity crisis on the 24th. Many dealers experienced abnormal quotes, soaring spreads, and trading interruptions. Some brokers even issued recommendations to avoid gold trading in this market environment until market order is restored.
"Affected by the epidemic, some global gold refineries have been forced to close recently, and supply has been reduced." Che Hongyun told a reporter from Chinanews. In addition, the US-Europe routes were restricted, and the blockage of gold transportation further led to insufficient market circulation and physical gold acquisition. Difficulties increase, short positions can not be delivered but can only choose to close the position, thereby forming a market forcing a large increase.
On March 24, COMEX gold futures surpassed the London gold spot premium for more than $ 60, reaching its highest level since 1980. According to market news, the London Bullion Market Association will provide support to CME Group to facilitate physical delivery in New York and ensure the effective operation of the global gold market.
At the same time, CME Group will launch a new gold futures contract, implement a flexible delivery method of 100 ounces, 400 ounces or 1 kg of gold bars, and increase the gold futures margin from $ 7,000 / contract to $ 8350 / contract.
"The increase in margin will curb excessive speculation to a certain extent and may lead price fluctuations back to rationality." Che Hongyun said.
Data Map: Bank staff are counting currency. China News Agency reporter Zhang Yunshe
Is the general direction of the rise in gold prices set? What should investors pay attention to?
It is unknown whether the price of gold is going to rise in the short term, or whether it will be a long-term trend. But the Fed's unlimited quantitative easing plan will have a huge impact on the market.
Che Hongyun believes that the Fed's unlimited easing, expansion of interest rates, and inflation concerns will pick up. Real interest rates will enter a downward channel and will likely cause the dollar to depreciate, which is good for gold.
In mid-March, since the Fed lowered interest rates to zero, more than 30 countries and regions around the world have introduced easing policies. Among them, the central banks of the United Kingdom, Australia, New Zealand and other countries have collectively cut interest rates, and the European Central Bank has urgently injected liquidity through other operations.
Although the global central banks are collectively "releasing water", some investors are still more cautious about gold investment.
Miss Li, who works at a bank, said that she has no intention of buying gold recently. "I have fried two waves of gold before and found it too difficult to speculate, so I gave up." She said that she wanted to buy gold bars directly last year, but hesitated Gold sang along all the way, rose for a year, and missed it without starting. I heard that the price of gold fell in the past two days, but after reading it, I didn't think it had fallen much. "Last year last year, it rose too much, and it didn't matter much for a day or two."
Mr. Sun believes that although gold has risen again in the past few days, relative to other assets, it can only be considered a slight increase recently. "I don't think this thing is safe, so I don't buy it."
In response to the problem of the price of gold, Che Hongyun believes that global easing policies and a negative interest rate environment will be maintained. Under many uncertain factors, the gold hedge function is still effective, and gold has long-term allocation value. "But in the short term, the expansion of the spread has exacerbated the difficulty and cost of the transaction, and the forced market situation has made the precious metal prices prone to sharp rises and falls, and the risk of chasing high is high." (End)