China News Network, March 3 (Zhongxin Finance Gong Hongyu) "Wait, each gram drops below 21 yuan, we will start." "Since February, in the context of the continuous decline in gold prices, many consumers have waited and waited and looked forward to a further decline in gold prices.
However, with the collapse of the Silicon Valley Bank overnight, risk aversion quickly accumulated, and gold prices suddenly stopped falling and rebounded, and began the "crazy" mode. Is now a good time to buy gold?
Infographic: Couple picking jewelry in a gold store. Photo by Zuo Yuqing
Investors hedge Gold prices soared
On the 19th, Xiaoli (pseudonym), who went to a gold store in Beijing to buy jewelry, was surprised to find that the 99 gold bracelet she fancy last week rose by more than 500 yuan in one week.
In fact, since March 3, the spot gold price has risen from $10,1869 per ounce, rising 3.17% in one day on March 3 alone, and gradually approaching the $64,2000 mark. On the afternoon of the 20th, the gold price once rose above $2000,1982 / oz intraday, and fell back to around $<>,<> at press time.
"Since the collapse of the Silicon Valley bank, the price of gold has been rising." A cabinet sister of a gold jewelry store in Beijing told Zhongxin Financial Reporter that the brand's gold price has risen by about 30 yuan / gram this month.
As the trigger for the current round of gold price rise, the bankruptcy of Silicon Valley Bank has caused the US financial market to continue to suffer. According to the Wall Street Journal reported on the 17th, the latest research shows that as many as 186 banks in the United States may have similar risks to Silicon Valley banks.
Not only that, the stock price of European century-old bank - Credit Suisse suddenly fell sharply on the 15th, and the stock prices of many European banks such as Societe Generale and Deutsche Bank also fell significantly.
Under the successive turmoil, the market's concerns about the spread of financial risks have intensified. In this context, as a precious metal backed by natural credit, gold has become the first choice for many investors to hedge, and the price has soared.
John Reade, chief market strategist of the World Gold Council, quoted the Financial Times as reporting on the 16th that concerns about the systemic risk of bank deposits, whether insured or not, may lead investors to switch some of their holdings to gold. Global gold-backed ETF inflows were 3t ($16 billion) as of 16 March, reversing a ten-week streak of outflows.
50 tonnes of gold were discovered in Shandong, China
When the "skyrocketing" of gold prices affected people's hearts, a few days ago, the news that Shandong Rushan discovered a gold deposit with a gold metal amount of nearly 50 tons rushed to the hot search.
According to media reports, the gold deposit is located in Xizhukou Village, Yazi Town, Rushan City, Shandong Province, and has good development prospects. This is the largest gold deposit detected in Weihai area, and it is also the largest gold deposit discovered in the country so far this year, which is of great significance to the increase of gold reserves and production in the country and the enhancement of domestic mineral resources guarantee capacity.
The discovery of gold deposits has also brought attention to Shandong, known as the "capital of gold mines". According to data released by the China Gold Association, nationwide, in 2021, Shandong Province ranked first in the country in terms of annual output of finished gold and was the largest province in gold production.
At the same time, there are concerns about whether the discovery of gold will affect the price of gold. In this regard, some industry insiders told the media that the impact on the overall gold price is limited.
Infographic: Formed gold bars are cooled in water.
Can we wait for gold prices to fall in the near future?
The sudden surge in gold prices has plunged consumers who had been waiting for price cuts into a new round of entanglement, should they buy at this time or wait? Will gold prices fall back?
In this regard, most people in the industry believe that the price of gold will still rise and is expected to maintain a bull market for a long time. Fu Honghao, an analyst at Huaxin Securities, said that preventing the spread of the Silicon Valley bank crisis has become the primary goal of the Federal Reserve, and it is expected that the Fed's monetary policy will become dovish in the later period, optimistic that gold prices will continue to rise. A research report released by CITIC Securities also pointed out that gold prices are expected to maintain an upward trend.
In addition, in the eyes of many institutions, the central bank's increase in gold holdings is one of the most effective weather vanes for gold price increases.
According to the official website of the World Gold Council (WGC), global central bank purchases of gold reached a record high in 2022, and the interest of central banks in gold in 2023 continued unabated. Krishan Gopaul, data manager at the World Gold Council, wrote on March 3 that global central bank gold demand has picked up at the start of 3. Global central bank official gold reserves increased by a net 2023t in January (up 2022% from the previous month).
CICC's research report also mentioned that in the long run, the global monetary system is facing profound changes, and the purchase demand for gold reserves is systematically rising. (End)