(Economic Observation) Can gold still be bought after the sharp drop in gold prices?
China News Agency, Beijing, August 12 (Reporter Liu Yuying) After the sharp drop on the 11th, the international gold price rebounded slightly on the 12th, but compared with the highest point, it still fell by about $140 per ounce. So, after a sharp decline, can gold still be bought?
On August 11, New York gold closed down 5.78% to $1921.8 per ounce, the largest drop since June 2013. Spot silver fell 14.7%, the most since the Lehman crisis.
Prior to the adjustment in recent days, the price of gold had been rising for several months. Since March 16, the international gold price has risen by more than 600 U.S. dollars in five months and hit a record high. There is already technical adjustment demand.
Moreover, since 2020, the international gold price has risen by more than 30%, and investors have sold off when the market sentiment for gold that hit a new high changed.
Nicos Cavallis, director of British Metal Focus, said at the release of the World Gold Yearbook at the end of July, “As the price of gold approaches and reaches its previous all-time high of US$1,920 per ounce, we will see quite radical profits. Give up."
In addition, Russia announced on the 11th that the first new crown vaccine has been registered, which also had a certain impact on the price of gold. Xu Zhiyan, general manager of the Huaan Fund Index and Quantitative Investment Division, believes that this has caused the market to increase the expectation that the extremely loose monetary policy may be tightened on the margin.
The US dollar interest rate is also closely related to the price of gold. Last week, the U.S. released non-agricultural employment data that exceeded market expectations. The 10-year U.S. Treasury bond began to rebound, and a series of better-than-expected data releases in Europe resulted in a rebound in real interest rates and adjustments in gold prices.
However, despite the short-term adjustment, many views believe that some fundamental factors supporting the rise of gold prices still exist, such as the epidemic, geological risks, and investors' risk appetite.
Xu Zhiyan believes that the global macro economy will maintain a relatively weak growth for a long time to come, and the possibility of a substantial exit from the easing policy is very low, and the monetary policy will remain relatively loose.
In terms of interest rates, Xu Zhiyan believes that it is very likely that developed countries such as Europe and the United States will maintain low nominal interest rates in the future, which also supports gold prices.
Nicos Cavallis said that for the second half of the year, the price of gold still has some potential to rise at the current price.
TD Securities predicts that by the fourth quarter of 2021, the average price of gold will be $2,100 per ounce and the average price of silver will be $30 per ounce.
Chen Huawei, a researcher at the Beijing Gold Economic Development Research Center, believes that after the price of gold breaks through the US$2,000 per ounce mark, it has got rid of the shackles of history, and the long-term upside has been completely opened up. The long-term goal is directed to US$2,800 per ounce.
On the 12th, the price of gold rebounded after dropping. By about 4 pm Beijing time, New York gold had risen to more than 1,940 US dollars per ounce, and London gold had risen to more than 1,930 US dollars per ounce.
However, we should still be alert to short-term risks. On the morning of August 12, the Shanghai Gold Exchange issued a warning stating that there are many uncertain factors affecting the operation of the market in the near future, and the price of gold and silver continues to fluctuate sharply in both directions, and reminds investors to take precautions against risks, control positions reasonably, and invest rationally .
Liang Yonghui, deputy general manager of Zhaojin Futures, said that in the long run, gold will continue to break new highs, but at present midline trading should be careful. (Finish)