Zhongxin Jingwei, March 3 (Ma Jing, Li Ziman, Wei Wei) The sound of two money counters sounded one after another, and several aunts took out neat stacks of cash from their cloth pockets and put them on the cash register, and the three cashiers were busy counting money and checking small receipts. This is a scene in front of the investment gold bar counter on the fourth floor of Beijing Caishikou Department Store at about 21:3 in the morning of March 21.
On the 20th, spot gold stood at $2000,2022 / oz, the first time since March 3. Driven by the rise in gold prices, since March, the enthusiasm of market funds for investment in the gold field has increased significantly, and gold concept stocks have risen significantly. At the same time, during the visit, Zhongxin Jingwei found that the offline gold consumer market was also very hot, and some sales said that on the weekend just ended, the counter was crowded with consumers who came to buy, from morning to night.
Caibai Gold Investment Gold Bar Counter Source: Photo by Ma Jing, Zhongxin Jingwei
The more expensive the buy, the offline gold consumer market is hot
Recently, affected by the crisis of European and American bank stocks such as Silicon Valley Bank and Credit Suisse, safe-haven demand has driven international gold prices up sharply. Data show that on March 3, the international gold price continued to climb, and the price of gold futures on the New York Mercantile Exchange (COMEX) once stood at $20,2000 / oz, approaching the all-time high of $2020,8 / oz in August 2089.
On the morning of the 21st, we visited the Beijing Caishikou Department Store in Beijing. The mall is the offline main store of Caibai Gold and one of the largest shopping malls for gold jewelry sales in Beijing. During our visit, we found that after the mall opened at 9:11, at least a dozen customers were inquiring at the counter selling rings, bracelets and other gold jewelry on the first floor, and by about 556:576, the counter was already crowded. The electronic display shows that the full gold of the day is <> yuan / gram, and the full gold ornaments are <> yuan / gram.
Caibai Gold Gold Price on March 3 Source: Photo by Ma Jing, Zhongxin Jingwei
A sales person of Caibai Gold said that the recent price of gold has risen rapidly, about 530 yuan / gram at the beginning of last week, and the price has been raised twice in a week, and now it is 568 yuan / gram. She also mentioned that there are also many people buying gold recently, and the flow of customers is okay on weekdays, and the counter is crowded on weekends, basically from morning to night.
Also popular are gold transfer beads, lucky bags, etc., and the counters where these jewelry are located are about three meters long, basically people next to each other. One woman said, "There are too many people, and I have been here for half a day, and I can't squeeze in." "Zhongxin Jingwei noticed that most of the people who came to buy were aunts in their fifties and sixties, who went shopping in groups. An aunt held up the gold ring on her hand and said that she had just bought it, and then bought 9 transport beads, "Now the price of gold is too high, but this kind of small thing is to buy a good meaning, which is only a few thousand yuan." ”
Customers who come to buy gold in Caibai Gold store Source: Photo by Ma Jing, Zhongxin Jingwei
About 10 people lined up in front of the cash register, about four or five customers traded directly in cash, and several stacks of banknotes were stacked on the counter. A couple just bought 30 grams of investment gold bars, and told reporters who came to visit, "Money is deposited in the bank, the interest is too low, it is better to buy some gold bars, this can also be given to the children." ”
Customers trading with cash at Caibai Gold Investment Gold Bar Counter Source: Photo by Ma Jing, Zhongxin Jingwei
Why is the price of gold soaring?
The staff of Lao Fengxiang's marketing department mentioned to Zhongxin Jingwei that the current gold consumption market is hot, firstly, the backlog of stock consumption after the epidemic is released centrally; Second, the momentum of high-end consumption is strong, especially for high-craftsmanship, high-art gold jewelry and ornaments (high gold prices and high labor costs have not curbed demand); Third, the international financial market crisis continues, uncertainty increases, the investment certainty of gold is prominent, and the demand for hedging and hedging promotes the continuous growth of consumption.
Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, told CSJW that investment and consumption are geared towards markets with different needs. Consumers buy gold jewelry to wear and give away. The premium price of gold jewelry contains artistic value. Therefore, jewelry is not designed to maintain value, and the value of jewelry is higher than the investment fund. People buying gold jewelry will pay attention to the function of preserving value, but no one will invest in gold jewelry for value preservation.
From an investment point of view, Ma Yinchen, a researcher at Zhixin Investment Research Institute, suggested in an interview with China News Jingwei that the sharp rise in gold prices is more caused by short-term factors, and investors should not blindly chase higher. The recent outbreak of the Silicon Valley banking incident has caused a large number of safe-haven demand to flood the market in a short period of time, which has driven gold prices higher rapidly.
"This instantaneous market reaction to a sudden event usually does not last long, and the subsequent gold market movement remains largely determined by market expectations of a global recession and the Federal Reserve's monetary policy." Therefore, investors should be more cautious in the face of soaring gold prices. Ma Yinchen believes that the gold price has risen quickly and sharply in recent trading days, and has failed to stand firm at the $2000,<> / oz mark, and the market may adjust in the short term, it is not appropriate to force entry at such a volatile time, it is recommended to wait for the market direction to be clearer and then make allocation plans.
Chen Yi, chief economist and director of the research institute of Sichuan Finance Securities, also told Zhongxin Jingwei that he is optimistic about gold investment opportunities in the long term, but "entering" gold needs to be timed. First, under the current macro background, it is difficult for the long-term inflation center to fall back quickly in the short term; The Fed's interest rate hike has come to an end, and the inversion of the nominal interest rate curve of U.S. bonds cannot be maintained for a long time, and the real interest rate center will decline as a result; Global central banks continue to increase their holdings of gold, and the strategic allocation position of gold is constantly improving. But at the same time, the price of gold has reached a high level, and it is necessary to wait for the right time to enter the market. If systemic risks are contained, market panic will be temporarily eased, and gold has a pullback opportunity and needs to enter the market at a timely time.
According to data from the China Gold Association, from January to February 2023, the cumulative trading volume of all gold varieties on the Shanghai Gold Exchange was 1,2.3730 tons per side (638,7461.277 tons on both sides), up 22.23% year-on-year, and the cumulative turnover was 1.5445 trillion yuan unilaterally (3.0891 trillion yuan on both sides), up 33.87% year-on-year.
Central banks "stockpile", will gold continue to rise in the future?
In fact, while the overall rise in gold prices, not only consumers are "buying, buying", but also the enthusiasm of central banks to "hoard gold" has continued for months.
According to a report released by the World Gold Council in December 2022, global central bank purchases rose to nearly 12 tonnes in the third quarter of last year, the highest quarterly gold purchase volume since 400.
The latest data from the World Gold Council shows that the size of central bank buying will further expand in 2023. Global central bank net gold purchases were revised up to 1t from 31t in January, and enthusiasm for gold purchases remains high amid high geopolitical uncertainty. The January data was up 77% from December last year.
In addition, according to data from the People's Bank of China, at the end of February this year, China's official reserve assets held a total of 2.6592 million ounces of gold, equivalent to about 2050,1 tons, an increase of 23.25% month-on-month, and about 4 tons of gold were purchased, increasing their holdings of gold for four consecutive months.
At a time when central banks are buying vigorously, the number of precious metal inventories at the exchange end has declined significantly. According to statistics from Minsheng Securities, since February 2022, gold and silver inventories on the New York Mercantile Exchange (COMEX) have fallen by 2% and 32% respectively.
From the performance of the capital market, recently, gold concept stocks have continued to "soar". As of March 3, the gold (CITIC) index has risen 21.7% this month, significantly outperforming the CSI 25. In terms of individual stocks, Yintai Gold rose by 300.17% this month, CICC Gold by 41.14%, Shandong Gold by 58.13%, Chifeng Gold by 44.11%, and Sichuan Gold has been up for thirteen consecutive trading days.
Will the hoarding boom of market investors and central banks create a priceless gold market? Is it possible that the price of gold will fall in the future?
In this regard, Chen said that the purchase demand for gold reserves is systematically rising. At present, global central banks are paying more and more attention to the degree of monetary and financial autonomy and control, and the demand for central bank gold purchase remains at a high level. Under the premise that the total demand remains stable, the attributes of gold's "super-sovereign" currency will continue to be highlighted, which will play a crucial role in optimizing the asset structure of foreign exchange reserves, maintaining the proportion of gold in foreign exchange reserves and stabilizing currency credit, and providing reasonable support for gold prices. From this point of view, even if there is no market, it will only be a short-term phenomenon.
Ma Yinchen said that short-term safe-haven demand and long-term "de-dollarization" are positive factors driving gold prices up, and the Fed's interest rate hike process is the biggest uncertainty. So far this year, the uncertainty surrounding the Fed's policy has led to a lack of definitive upward logic in the gold market. But at the same time, with inflation still high and the risk of a recession in the U.S. economy, the overall market environment is conducive to safe-haven demand for gold. If the Fed's interest rate hike path is really changed, it means that a major resistance to the upside of the gold market has disappeared, combined with the current risk of recession around the market and other risk-driven safe-haven demand, gold prices are expected to rise in the medium term, and may even return to the upward trajectory that began in 2019. Especially under the trend of global "de-dollarization", central banks continue to increase their holdings of gold reserves, which indicates that the gold market will face a more upward macro environment in the future. (Zhongxin Jingwei APP)