Gold is sold out, can you still buy it now?

Text/Liu Yuying

　　This Spring Festival, gold consumption is also hot.

Driven by a series of policies to boost consumption, gold and silver jewelry, Year of the Dragon gold bars, etc. were all hot sales throughout the year.

Young people fall in love with buying gold

　　The Spring Festival is the peak season for gold consumption. At gold brand counters in Shanghai, Guangzhou, Changsha and other places, gold jewelry, pendants, transfer beads and other accessories related to the Year of the Dragon, as well as gold bars and gold coins, are all favored by consumers.

　　Today, gold jewelry is no longer synonymous with "tacky".

Especially with the emergence of new technologies, gold jewelry of various small weights and new styles, as well as small golden beans with the function of saving money, have entered the field of public consumption, making gold a "favorite" for many people.

　　It has become a trend for young people to like jewelry. In recent years, consumer Ms. Huang likes to buy jewelry at gold jewelry brand counters for her own use or as gifts for relatives and friends.

"Buying gold jewelry can not only be worn, but also maintain value, taking into account both beauty and investment." Ms. Huang said that on the eve of the Spring Festival, she bought an ancient gold bracelet as a gift to her mother.

　　Just after the Spring Festival, Tianya Jewelry City in Beijing's Second Ring Road was crowded with people. Young people like to "hunt for" real gold and silver here at prices lower than those at counters.

　　The Shanxi Securities Research Report pointed out that benefiting from the traditional peak sales seasons of the Spring Festival and Valentine's Day, superimposed gold jewelry has both value-preserving and adding-value attributes and pleasing consumption attributes. During the Spring Festival, gold jewelry sales increased and performed well in physical consumption during the Spring Festival.

　　Shandong Zhaojin Gold and Silver Refining Co., Ltd. is a company with a full industry chain in the gold market. Liang Yonghui, deputy general manager of the company, said that in addition to gold consumption such as gold bars and jewelry, some gold products with small weight are also particularly popular, and some young people consider purchasing Small golden beans weighing 1 gram or several grams as a way to save money.

　　In the past year of 2023, the consumption of gold bars and gold coins with lower premiums has achieved rapid growth.

Statistics from the China Gold Association show that in 2023, national gold consumption will be 1,089.69 tons, an increase of 8.78% compared with the same period in 2022.

Among them: 706.48 tons of gold jewelry, a year-on-year increase of 7.97%; 299.60 tons of gold bars and gold coins, a year-on-year increase of 15.70%.

　　Domestic gold investment in China also continues to be hot.

In 2023, the size of domestic gold ETF holdings showed a steady growth trend. As of the end of the year, domestic gold ETF holdings were approximately 61.47 tons, an increase of 10.04 tons compared with the same period last year, and a year-on-year increase of 19.53%.

　　Liu Yuning, a senior gold analyst and visiting professor at China University of Geosciences, told a reporter from Guoshi Express that the reason for the current "gold consumption boom" is that consumers hope to increase investment options when investment channels in the property market and stock market have narrowed. Achieve asset preservation and appreciation.

Why does the price of gold continue to rise?

　　In 2023, supported by geopolitical risks, large-scale gold purchases by central banks and increased expectations of interest rate cuts by major central banks, international gold prices will fluctuate at high levels.

　　At the end of December 2023, the year-end spot gold price in London was US$2,062.40 per ounce, an increase of 12.39% from the opening price at the beginning of 2023, and the annual average price was US$1,940.54 per ounce, an increase of 7.80% from the average price of the previous year.

　　The Shanghai midday benchmark gold price (SHAUPM), denominated in yuan, rose 17% in 2023, the best performance among major yuan assets.

　　The latest "Global Gold Demand Trend Report" released by the World Gold Council states that taking into account gold demand from the over-the-counter market and other sources, gold demand in 2023 will rise to 4,899 tons, setting a new historical record.

　　Liu Yuning said that the U.S. dollar is in an interest rate hike cycle in 2023, but the price of gold has risen instead. This performance is unusual.

One of the important factors is that global geopolitical conflicts will continue in 2023, which will push up the price of gold.

In particular, the Palestinian-Israeli conflict in October last year caused the price of gold to return to US$2,000 per ounce and hit a record high of US$2,146.

　　Different from the previous performance of gold price falling when the U.S. dollar raised interest rates, from October 2022 to May 2023, the U.S. dollar was in an interest rate hike cycle.

The market expected that the Federal Reserve would stop raising interest rates in May 2023, so gold went on an upward trend before May.

　　The safe-haven function of gold is also one of the reasons why international gold prices have risen continuously since 2023.

　　In terms of reserve assets, gold is one of the important components of the foreign exchange reserves of central banks of various countries.

As of the third quarter of 2023, global official gold reserves totaled 35,827.5 tons.

　　The People's Bank of China will increase its gold holdings by 224.88 tons throughout 2023. As of the end of 2023, my country's gold reserves will be 2,235.41 tons.

From November 2022 to December 2023, the People's Bank of China has increased its gold holdings for 14 consecutive months.

　　The World Gold Council believes that the continued gold purchases by global central banks in 2023 will strongly boost gold demand and offset to a certain extent the weakening demand in other areas of the gold market.

What factors will affect the gold price trend in 2024?

　　Entering 2024, the international gold price went through a wave of oscillation and downward trend at the beginning of the year.

In China, January was just before the Spring Festival holiday, and domestic demand for gold surged. This, coupled with the reduction in gold imports in recent months, led to a tighter supply and demand relationship, which caused a firm domestic gold price and formed a premium.

　　Regarding the global gold price trend in 2024, analysts believe that expectations of interest rate cuts by the Federal Reserve, general elections in many countries, and geopolitical situations will all have an impact on gold prices.

Among them, whether the Federal Reserve cuts interest rates is the most critical factor.

　　The minutes of the Federal Reserve's meeting at the end of January 2024 showed that it would not be appropriate to cut interest rates until it is more confident that inflation will continue to move towards 2%.

　　The U.S. CPI increased by 3.1% year-on-year in January, which was higher than the expected increase of 2.9%. The CPI increased by 0.3% month-on-month, which was higher than the expected increase of 0.2%.

At present, expectations of interest rate cuts by the Federal Reserve continue to cool down, which will suppress gold prices in the short term.

Capitallight Research, a Canada-based research organization, believes that it is only a matter of time before the Federal Reserve abandons its inflation target and cuts interest rates to support the economy.

This shift in monetary policy will drive renewed investment demand for gold, pushing prices higher.