(Finance and Economics) Can the price of gold rise again in the market outlook?
China News Agency, Beijing, April 13 (Liu Wenwen) Since the conflict between Russia and Ukraine, the price of gold has fluctuated wildly.
Last week, the Federal Reserve proposed a more aggressive interest rate hike plan and accelerated the pace of shrinking its balance sheet, which stimulated the dollar and U.S. bond yields to rise, under which gold prices were under pressure.
But gold prices have picked up again this week.
On the 12th local time, the most actively traded June gold futures price on the New York Mercantile Exchange closed at $1,976.1 an ounce, an increase of 1.43%.
This is the first time the international gold price has closed above the $1,970 mark in a month.
Why is the price of gold rising again?
Can this recovery last?
Many experts have pointed out that there are two supporting factors for the upside of the gold price.
First, intensified geopolitical risks support the rise in gold prices.
At present, the conflict between Russia and Ukraine continues to ferment, and the sanctions imposed by Europe and the United States on Russia continue to increase.
Huaan Securities analyst Ma Yuanfang pointed out that the Russian-Ukrainian crisis has pushed gold prices higher in stages.
Short-term risk aversion supported the rise in gold prices, and gold became a safe-haven asset that performed well during the Russian-Ukrainian crisis.
According to Wind data, the spot gold price in London rose 7.9% in February and March, while the S&P U.S. sovereign bond index fell 4.98% and the euro zone sovereign bond index fell 2.17%.
However, it is not difficult to see through the review that the geopolitical war is a staged catalyst for the price of gold, and it depends on the breadth and depth of the event. If the situation becomes clear in the later stage, the price of gold may gradually return to rationality.
Ao Chong, chief analyst of CITIC Securities Cycle Industry, also believes that the Russian-Ukrainian conflict and the resulting US-EU sanctions on Russia have not yet been resolved. Under the expectation of potential conflict, the market risk aversion cannot be eased in the short term, which has a negative impact on gold prices. support.
Second, high inflation supports gold prices to remain high.
Since March, due to factors such as the conflict between Russia and Ukraine and the disruption of supply chains, energy, housing costs and food prices in the United States have all risen significantly, and the inflation situation in the United States has become increasingly severe.
According to data released by the US Department of Labor on the same day, the US consumer price index (CPI) rose by 1.2% month-on-month in March and increased by 8.5% year-on-year.
The year-on-year increase was the largest since December 1981.
In addition, the strong rebound in international oil prices pushed up overseas stagflation risks.
Expert analysis pointed out that after the three surges in oil prices in 2008, 2011 and 2018, the manufacturing PMI in the euro area all fell below the line of prosperity and decline.
The risk of stagflation has pushed policy into a dilemma, raising uncertainty in the global economy and financial markets, and further supporting gold prices.
The Huatai Futures Research Institute believes that the soaring U.S. CPI and the sharp rebound in crude oil prices have largely offset the adverse impact of the previous U.S. bond yields and the strengthening of the U.S. dollar on the price of gold, and it has once again proved that due to energy In the context of the mismatch between supply and demand caused by tightness, the inflation level will not be changed immediately due to the tightening of monetary policy, and the current geopolitical uncertainty also disturbs the market from time to time.
When investors' concerns about the U.S. economy falling into recession are gradually increasing, gold's "anti-inflation" ability is also further demonstrated, attracting more investors to return.
Ao Chong's analysis pointed out that high inflation and economic recession worries have caused the market to start trading "stagflation" expectations. As the best asset allocation value in the "stagflation" period, the value of gold has increased. The uptrend in the index suppressed the price of gold.
"This shows that the current level of inflation is the core factor affecting gold prices."
"The current gold price is affected by both positive and negative factors of high inflation and rising interest rates. Affected by the conflict between Russia and Ukraine and the repeated epidemics, it is expected that the positive impact of high inflation expectations and risk aversion on the price of gold will prevail and continue to support the high price of gold. Run." Ao Chong said.
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