The enthusiasm for investment in gold reserves has not decreased, and the People's Bank of China has increased gold reserves for 11 consecutive months. The latest data showed that gold reserves in official reserve assets reached 9.7046 million ounces at the end of September, up 84,50 ounces from the previous month. During the past Mid-Autumn Festival National Day "Double Festival", gold jewelry, gold bars, golden beans, etc. were sought after by consumers, and the news that "girls gave up buying diamond rings and spent <>,<> yuan to buy gold bars" once rushed to Weibo hot search.
The pre-holiday gold purchase fever coupled with external environmental factors prompted the domestic gold price to rise continuously, once breaking through 610 yuan / gram. However, the rapid correction in gold prices in less than a week has also led many consumers who bought gold at the pre-holiday price high to call themselves "big wrongs". With days of decline, is gold investment still worth getting on the car?
Gold reserves rose for 11 consecutive months
The gold reserve boom continues. On October 10, the State Administration of Foreign Exchange released data showing that as of the end of September, gold reserves reached 7.9 million ounces of official reserve assets, up 7046,84 ounces from the previous month, and gold reserves have increased for 11 consecutive months, accounting for 4% of China's total official reserve assets.
Central banks are enthusiastic about gold reserves, and have joined the army of gold "rush to buy" and continue to increase the amount of gold reserves. According to the World Gold Council, global gold reserves increased by 8t in August, up 77% from purchases in July, with central banks buying 7t of gold over the past three months.
Zhou Maohua, an analyst at the financial market department of China Everbright Bank, believes that the People's Bank of China's increase in gold reserves is mainly to comply with the global development trend, optimize and diversify the asset structure of official reserves, improve the stability of official reserves, and enhance the ability to resist external risks. The risk of public debt in the United States and other economies continues to rise, geopolitical conflicts, the US dollar and some international financial infrastructure are "weaponized", the US dollar credit declines, coupled with the significant increase in global political and economic uncertainty, the People's Bank of China's reasonable increase in gold reserves will help diversify risks, enhance the stability of official reserve assets, and enhance the resilience of the development of the financial system.
While the People's Bank of China bought gold on a large scale, consumers also set off a boom in gold investment. During the "Double Festival" of the Mid-Autumn Festival National Day just past, gold jewelry, gold bars, golden beans, etc. were sought after by consumers, and the news that "the girl gave up buying diamonds and spent 50,<> yuan to buy gold bars" once rushed to Weibo hot search.
According to reports, Tian Tian, a "post-90s" Beijing girl, gave up buying a diamond ring on the eve of her wedding and bought an investment gold bar. Tian Tian said: "Since last year, the price of gold has been rising, and it is obviously more appropriate to buy gold. So when my mother-in-law took me to choose wedding jewelry, I decisively chose gold. In order to maintain and appreciate my value, I finally bought 50,<> yuan of investment gold bars. ”
Due to the characteristics of gold taking into account jewelry and value preservation, it is gradually sought after by the younger generation. "Now I like gold more and more," consumer Wang Yumeng (pseudonym) said frankly, when he was a child, he felt that gold was very dirty, and every time he watched the news, he grabbed gold like buying vegetables, thinking that he would definitely not be able to do so in the future, but he didn't expect that now he is "questioning auntie, understanding auntie, and becoming aunt."
Gold prices retreated after soaring
Driven by factors such as the People's Bank of China's gold purchases and consumer investment, domestic gold prices rose continuously on the eve of the National Day, once breaking through 610 yuan / gram. However, it took less than a week for gold prices to fall back quickly. Taking Chow Tai Fook as an example, on September 9, the price of Chow Tai Fook full gold (jewelry, ornaments) once rose to 21 yuan / gram, with the gold price correction, on September 615, it has fallen to 9 yuan / gram, as of October 28 has been 596 yuan / gram.
The fall in gold prices has led many consumers who bought gold at the pre-holiday high price to call themselves "big wrongs". "I may be a 'big wrongdoer', I bought a gold pendant on the day of the Mid-Autumn Festival on September 9, the gold price on that day was 29 yuan / gram, and the gold price fell again the next day, and it has been falling for the next two days." Consumer Liu Lin (pseudonym) sighed.
Consumer Zhao Xiaowei (pseudonym) also said that she bought a total of more than 20 grams of gold stud earrings and necklaces before the holiday, when the gold price was 610 yuan / gram, but two days later the gold price had dropped to 580 yuan / gram.
"Gold prices retreated after the holiday, reflecting an improvement in the domestic supply and demand margin, and a change in market expectations." Zhou Maohua said that the gradual decline in physical retail gold prices is mainly due to the weakening of the impact of festivals such as weddings, and the average reversion of gold spreads, especially when the international gold price has fallen significantly, accelerating the narrowing of the spread.
In terms of international gold prices, London spot gold fell for nine consecutive trading days from September 9 to October 25, setting a new record for consecutive declines during the year. However, on October 10, after dipping to $5.9 / oz, it stabilized and recovered to 10.7 US dollars / oz, but it was still down nearly 1810% from the closing price on September 33. COMEX gold fell in tandem, falling for nine consecutive trading days since September 1831, and as of the close of trading on October 48, the gold price recovered to $9.22 / oz, but still fell more than 5% from the closing price on September 9.
Diversified investment allocation is required
Is gold still worth getting on at the moment when the price of gold falls? What will be the trend of gold prices in the future?
Xue Hongyan, vice president of Star Map Financial Research Institute, said that in the fourth quarter, the factors supporting and suppressing gold prices exist at the same time, and gold prices are likely to fluctuate at a high level, and it is difficult to rise unilaterally. The main factors that suppress are that the probability of the Fed's interest rate hike in November is increasing, and gold with the US dollar as the target will depreciate after the US dollar appreciates; The supporting factor is that gold with commodity attributes benefits from the high inflation environment, while the increased uncertainty of the international geopolitical situation will also support gold with safe-haven properties.
However, in the medium and long term, Xue Hongyan believes that as the Fed ends the interest rate hike cycle, the suppression of gold by U.S. bond interest rates weakens, and at that time, under the support of multiple factors such as commodity inflation, safe-haven attributes, and de-dollarization, international and domestic gold prices will still have a good performance, and investment income is worth looking forward to. From the perspective of the next three to five years, gold is still expected to continue its outstanding performance in the context of the acceleration of anti-globalization and the heating up of global uncertainties.
For consumers' suggestions for investing in gold, Xue Hongyan pointed out that for domestic investors, considering the long-term decline in deposit interest rates and the advent of the long-term cycle of real estate, high-quality investment products are becoming more and more scarce, and holding a certain position of gold for long-term investment is a good choice. From the specific variety point of view, since physical gold is not a good investment product, storage and transaction costs are too high, investors can choose paper gold or buy gold ETFs.
Zhou Maohua suggested that at present, domestic gold investment products are relatively rich, and ordinary investors need to choose investment products or tools suitable for themselves according to their investment professional ability and risk appetite. However, at present, under the condition that the trend of overseas inflation, policy, economy and geopolitical conflicts is still not clear enough, market expectations are divergent, and the probability of corresponding price fluctuations is high. In an environment of high uncertainty, investors are advised to fully assess their risk tolerance and liquidity needs, diversify their asset portfolio, and try to stabilize their portfolio returns.
Beijing Business Daily reporter Li Haiyan