Benefiting from the cooling of the US June CPI data, the market expected that the Fed's tightening cycle had come to an end, and the international gold price fluctuated upward on July 6, and as of 7:13 on the same day, COMEX August gold futures rose 22.24% to $8.0 / oz.
After a new round of deposit rate cuts, individual investors' gold buying fever continued to rise: some consumers in Guangzhou smashed 140.6 million yuan to buy gold bars at one time; Gold stores and banks also made frequent successes: "large orders one after another" and "double the sales volume"... Not only that, but global central banks are also buying, buying, buying, and as of June this year, the People's Bank of China has increased its gold holdings for eight consecutive months, and has accumulated 8.531 million ounces of gold in the range.
The data showed that the dollar gold rose 5.4% in the first half of the year, outperforming all other major assets except the stock market of advanced economies. So, is now a good time to buy gold? Can gold be an important choice for investors to diversify risk and obtain solid returns? Through field investigation and multiple interviews, Guangzhou Daily all-media reporters answered a series of doubts about investing in gold.
Text/Guangzhou Daily All Media Reporter Lin Xiaoli Xu Xiaofang
Gold price trend: Slowing economic growth helped gold prices higher
According to the World Gold Council's recently released 2023 Global Gold Market Mid-Year Outlook, according to the World Gold Council, the dollar gold price rose 5.4% in the first half of this year, ending at $1912.25 / oz, outperforming all other major assets except the stock markets of developed economies.
However, entering July, gold prices fluctuate frequently, so what is the next trend of gold prices?
The World Gold Council believes that if the expected mild recession in the US economy materializes, gold that performed strongly in the first half of the year is likely to level off in the second half. In the event of an apparent recession, market volatility will also increase, pushing investors towards safe-haven assets in favor of gold. Conversely, if the tightening lasts longer than expected, then gold will face challenges. Similarly, a soft landing in the economy is positive for risk assets and could push the dollar stronger, leading to a less attractive gold rating.
Hu Yifan, investment director and head of macroeconomics at UBS Wealth Management Asia Pacific, recently said that gold will benefit from a weaker dollar in the second half of the year, as a pause in interest rate hikes will cool the dollar. "A weaker dollar is likely to be positive for gold, which is expected to return to $2000,<>/oz by the end of the year." Hu Yifan thought.
However, some analysts are cautious. "In the absence of greater news catalysis, it is expected that the international gold price will remain in a weak range shock pattern in the second half of the year." Zhou Maohua, a macro researcher at China Everbright Bank, believes that the probability of the Fed cutting interest rates within the year is low, and the tight financial environment still supports the US dollar. Coupled with the global economic slowdown, sluggish manufacturing performance and foreign exchange market volatility, the outlook for physical gold demand is weak, and gold prices face resistance to the upside in the second half of the year.
"We have slightly adjusted our bullish view on gold, downgrading our view on gold relative to other assets to neutral, with a price expectation of $12,2050/oz over the next <> months." Xinjie Wang, Chief Investment Strategist of Standard Chartered China Wealth Management, said.
Central banks open the "buy, buy, buy" model and hedge funds go to the bottom
Central banks have also started a "buy, buy, buy" model and continue to increase their holdings of gold reserves.
According to the latest data released by the People's Bank of China on July 7, as of the end of June 7, the PBOC's gold reserves reached 2023.6 million ounces, an increase of 6795,68 ounces from the previous month. This is the eighth consecutive month that the People's Bank of China has increased its gold holdings, and the range has accumulated 8.531 million ounces of gold. If calculated according to the average price of the range, the corresponding increase in holdings is about 730 billion yuan.
According to the latest survey data released by the World Gold Council, in addition to some countries such as Turkey and Germany, global central banks continued to buy gold in May.
The World Gold Council noted that central banks remain interested in gold. The unresolved geopolitical issues, combined with their impact on inflation, interest rates and market outlook, are bound to be the focus of concern for many central banks. Central banks in emerging market and developing economies are particularly concerned about the impact of geopolitics on their reserve management decisions, with many of them seeing gold as a way to combat geopolitical risks.
It is also worth noting that more and more hedge funds are quietly buying gold. The latest data released by the U.S. Commodity Futures Trading Commission (CFTC) showed that hedge fund-based asset managers increased their net long positions in COMEX gold futures options by 7.3 million ounces from the previous week in the week ended July 127, indicating that these hedge funds are preparing for the risk of future U.S. recessions.
Gold Store Bank: "Big Orders" Continue to heat up gold sales
"Recently, a regular customer in the mall bought 2800,140 grams of gold bars, worth almost <>.<> million yuan!" Manager Li, the director of Guangbai Gold, told reporters that gold sales in gold stores have been hot recently, and "big orders" have been repeated.
According to Manager Li, in the first half of this year, the gold sales of the mall increased by double digits year-on-year, and at present, the gold sales of the mall are still dominated by jewelry gold, and the sales of investment gold bars account for 18%. "Recently, the gold price of jewelry is almost 585 yuan a gram, and the price of gold per gram of jewelry in the second quarter basically fluctuates between 569 yuan and 592 yuan." "There is an endless stream of people buying gold."
According to Dai Chongye, manager of Guangzhou Dongbai Business Department, the gold sales of Dongbai stores in June ~ July increased by 6% year-on-year. Consumers buying gold jewelry dominated the pack. There are many young people who have joined the "tide" of buying physical gold, "if the budget is not high, they will save a gram of 'golden beans', and young consumers with higher budgets will also choose to buy 7 grams ~ 23 grams of investment gold bars."
A relevant person from the Guangzhou branch of ICBC told reporters that the bank's physical gold bar sales volume has nearly doubled year-on-year recently, mainly purchased by individual customers. On July 7, the price of 12,1000 grams of ruyi gold bars was 464.38 yuan / gram. "Ruyi gold bar quotations are updated daily with the international gold price, and have recently been in a state of sideways fine-tuning." Relevant people said.
In this context, banks and other financial institutions have made efforts to lay out precious metal business and actively launched customized physical gold, precious metal accumulation and other products.
The reporter learned that gold accumulation is a debt business in which the bank opens a gold account for a customer and records that the customer deposits a certain amount of gold in a certain period of time, which can be redeemed, transferred and pledged. "If customers choose to accumulate regularly and buy gold in batches for a long time, it can effectively diversify the risk of large investments, and it is very popular among customers of different asset volumes." Relevant people from ICBC Guangzhou Branch said.
Invest in Q&A
1. Can I still buy gold now?
Wang Xinjie said that although gold was downgraded to neutral, gold still has a place as a ballast stone for portfolios in diversified allocation. "Historically, gold has outperformed in recessions and exhibited safe-haven properties in times of crisis. Against the backdrop of heightened macro uncertainty, especially in the current context of low investor allocation, these characteristics add to gold's attractiveness as a hedge. ”
"It's not the best time to buy a lot right now." Zhu Zhigang, vice president and chief gold analyst of the Guangdong Gold Association, believes that the current gold price position has fallen from the previous high, but it is still at a high level. As far as investment is concerned, he suggested that if consumers do not have much gold in their hands, they can choose to buy dips in batches, and each decline is a buying opportunity.
2. Can investing in gold fight inflation?
Zhou Maohua believes that from the past ten years, the price of gold has risen by more than 6%, which is much higher than the inflation increase in major economies in the world, and gold has a certain ability to resist inflation; However, it should be noted that in recent years, when the price of gold has fluctuated sharply, investors need to firmly hold non-interest-bearing gold assets for a long time.
Zhu Zhigang believes that gold mainly plays the role of a hedging tool, and consumers should buy gold based on the goal of allocation of hedging, rather than feeling that buying gold can resist inflation and make steady profits.
3. From the perspective of household asset allocation, what proportion of investment gold is preferred?
Zhu Zhigang believes that considering the liquidity and hedging nature of gold, the proportion of gold allocation in household investment is not recommended to be too high, "about 5%~10% of the range can be, the overall allocation recommendation is not more than 10%. ”
Tang Linmin, a senior researcher at international futures, believes that the recommendation of household asset allocation is generally 5%-10%, and families with professional investment gold capabilities can be appropriately allocated.