China-Singapore Jingwei Client, November 27 (Song Yafen) In the past two weeks, international gold prices have fallen sharply by more than US$150, a four-month low.
Although the price of gold rebounded slightly this Wednesday (25th), it still hovered at $1,810 per ounce.
Why has the price of gold dropped sharply recently?
Should investors take the opportunity to "buy the bottom" to buy?
Why has the price of gold plummeted recently?
Since the beginning of this year, affected by the epidemic and global quantitative easing, international gold prices have entered a period of rapid rise, reaching a high of US$2075 per ounce.
On November 25, the main COMEX gold futures contract was quoted at about $1807.06 per ounce, which was the lowest point in the past 4 months at $1797.1 per ounce.
As of November 26, the price of gold has rebounded, but it is still hovering around $1810 per ounce.
Why did the price of gold fall sharply?
Zong Liang, chief researcher of Bank of China, said in an interview with the Sino-Singapore Jingwei Client that the price of gold has gone through a stage of rapid rise this year.
It should be said that the price of gold must take some time to consolidate at this time, and it is impossible to rise sharply.
"In addition, as a safe-haven product, gold's decline is closely related to the international situation. The current global situation is slowly stabilizing, the U.S. election situation is basically certain, and the probability of a global war in the short term is minimal. So basically it is all It is a predictable factor. At this time, the price of gold tends to stabilize, and it is quite normal to even say that it shows a fluctuating trend in a position." Zong Liang added.
Lin Caiyi, vice president of the China Chief Economist Forum Research Institute, also believes that the important reason why gold has risen so much before is related to the United States.
The continuous spread of the new crown epidemic in the United States, coupled with the weakening of the U.S. dollar, and various global instabilities are important factors for gold's strength.
And now that the price of gold has fallen, it is still related to these factors.
Lin Caiyi pointed out, “Now the suspense of the US election is gone, and the situation is very clear. The US dollar index has fallen very sharply in the first two quarters of this year. I personally think that it has bottomed out, which will also suppress the price of gold.”
Does gold price usher in an opportunity to "buy the bottom"?
Some analysts believe that the price of gold has fallen by hundreds of dollars and may still rise sharply in the future. It is a good time to "buy the bottom".
So, is the market we see now really "bottom"?
In this regard, Lin Caiyi analyzed, I think the price of gold is not low now.
The future direction of gold prices depends on two factors: one factor is whether the dollar index will continue to fall sharply in the future, and the second factor is whether there will be fierce conflicts in the international geopolitical situation.
"However, I personally think that the possibility that the dollar index will continue to fall sharply is very small." Lin Caiyi said, "the possibility of large-scale conflicts in international geopolitics is unlikely. Therefore, I personally think that even if there is a market for gold, it may belong to Trading opportunities, not trending opportunities."
Zong Liang also predicts that in a period of time in the future, such as a year or so, the overall level of gold prices should be at a relatively high level, with a kind of shock or consolidation, and it is difficult to return to more than 2000.
Zong Liang pointed out that if investors expect to make a lot of money by buying gold now, it will be more difficult.
But it is possible to allocate gold as an asset portfolio.
"As a safe-haven asset, although the status of gold has declined, it has shown a trend of recovery in recent years. The reason is that credit currency does not emphasize credit. This is a big problem in global financial development. In some cases, Quantitative easing has almost no bottom line. In this case, holding a portion of gold is still very meaningful for stabilizing the asset portfolio." (Zhongxin Jingwei APP)
All rights reserved by Sino-Singapore Jingwei. Without written authorization, no unit or individual may reprint, extract and use it in other ways.