Looking back at the first half of 2019, the impact of domestic RMB devaluation, trade frictions and geo-risk and other instability factors intensified. Since the second quarter of 2019, gold prices began to rise substantially, becoming the best performing asset in the large class, and the highest price returned to the level of June 2013. The publics demand for hedging and wealth preservation has also continued to rise.
In terms of asset allocation, gold is one of the standard products for many investors. So, in terms of gold prices, what is its follow-up performance?
Money making effect
You might as well look at the scene of the Golden Shop. Its a busy market.
On October 9, the reporter inquired about the price of gold and the popularity of public investment in gold bars and jewelry in several gold shops in Wangfujing business circle in Beijing. Among them, jewelry gold in many gold shops is more than 440 yuan per gram, and gold bars are more than 400 yuan per gram. A number of gold salesmen told reporters that gold ornaments in the same period last year were about 350 yuan per gram, up nearly 100 yuan per gram.
As for the time point and reason of gold price rising, many gold salesmen said that in ordinary life, gold as a souvenir for holidays, birthdays and so on is popular with the public, and the sales volume of gold jewelry and bars is relatively stable. Since the Sino-US trade war in 2018, gold has been on the rise. Especially in the first half of this year, with the price of gold rising a lot, many investors came to inquire and buy financial products as value-preserving and value-added.
Wind London gold (RMB/g) market trends show that gold prices have been rising since the second half of 2008. Gold prices have increased significantly since the second quarter of this year. As of 11 a.m. on October 10, the price of 273.68 yuan per gram rose from April 17 to 345.15 yuan per gram on October 10, up 26.11%.
However, with the rising price of gold, the public demand for selling gold is also increasing. A gold shop salesman told reporters on October 9 that old customers now need to reserve in advance because there are more people making reservations than last year, with a period of about 2-3 months. Return prices are generally compared to the current London gold price, which is slightly lower than the London gold price in the open market.
Therefore, the salesman told the Economic Observer that gold bars should be recommended if gold is invested, because the handicraft fee of gold jewelry is higher and the purchase price is higher, so the price of gold bars should be reduced by 2-5 yuan according to the London gold price at that time, while the price of gold bars invested in gold bars is lower than that of gold jewelry and 10 yuan higher than that of gold bars invested in London. About RMB, because it is more convenient to start in the late stage of investment, if the price of gold rises, the return will be higher.
Short-term and long-term investment
But can gold prices continue to rise in the fourth quarter?
In the first half of the year, Londons gold price has risen by more than 25%. On the one hand, the publics enthusiasm for gold allocation remains unchanged, making it the darling of wealth preservation and appreciation; on the other hand, due to the high price of gold, some public have begun to invest cautiously in gold.
On October 10th, a gold investor said that the RMB had been depreciating in the first half of the year, the stock market was turbulent, and trade friction saw, so he chose to buy some gold as a value-preserving and value-added product.
According to the China Gold Association, in the first half of 2019, gold jewelry consumption continued to maintain a steady growth trend, but since the second quarter, the growth rate has slowed down, and the gold jewelry consumption market has obvious de-stocking.
A number of gold salesmen told reporters on October 9 that in the first half of the year, with the continuous rise in gold prices, consumers investing in gold have shown a situation of rising and buying, which is similar to investing in stocks. Gold allocation in the first half of the year is not only the choice of ordinary investors, but also a good investment opportunity for some institutions.
On the other hand, many investors also hold a cautious wait-and-see attitude. The woman who has been paying attention to gold investment for a long time said to reporters that the price of gold has risen a little bit and buying investment is not the best choice. She will continue to watch the market change and invest in time.
China Gold Association said that in terms of consumption of gold bars, investors were cautious and wait-and-see attitudes due to the rising price of gold, which led to a decline in demand for gold bars. As for the future trend of gold prices, the China Gold Association issued an article in early August, saying that in the medium and long term, gold prices may rise further.
Huang Jun, Chief Chinese Analyst of Jiasheng Group, believes that in the fourth quarter of 2019, the Fed has a high probability of using interest rate cuts, expansion and other means, regardless of which means the Fed will take for gold. So gold will continue to be good for some time in the future, there is a possibility of further upward.
As for Chinese aunt not following, Xiao Lei, a financial analyst, told reporters that in the long run, gold has financial and monetary trends and has a strong ability to resist risks, so it mainly needs to start with a longer-term allocation. However, in the short term, there are many factors affecting gold price. There may still be many factors affecting gold price in the future. The fluctuation of the overall price will have obvious bidirectionality. But overall, as the uncertainty of risk assets, especially the US capital market and the US dollar trend increases, gold may have a further slow climb.
As for the future performance of gold prices, CITIC CCI Securities Research reported that in 2018-2019, under the background of the U.S. trade war, the global economy showed a certain negative impact. The Federal Reserves interest rate cuts and the drop in global real interest rates will drive up gold prices. Secondly, global geopolitical risks and the process of anti-globalization are rising, and risk factors are driving gold prices up. Therefore, it is suggested that investors should allocate more gold at present to grasp the investment opportunities brought by interest rate cuts in overseas markets and rising geopolitical risks.
In Ping An Securitiesview, gold prices are expected to continue to rise in overseas asset allocation in the fourth quarter, bond markets will benefit from easy overweights, RMB, Swiss franc and Japanese yen will also benefit from hedging; the US dollar index and US stock market are facing adjustment, emerging market stock market differentiation will continue, and Asian emerging markets supported by economic fundamentals will perform well. Looking at gold as an inflation-protected bond, the price is closely related to the real interest rate. Nominal interest rate is the dominant factor of gold price in the current low inflation environment. Tianfeng Securities believes. From another point of view, the size of negative interest rate bonds is closely related to the price of gold. The rise in gold prices, the decline in U.S. Treasury bonds and the increase in the number of negative interest rate bonds around the world tell the same story: In the context of the global economic downturn, monetary policy has to take on more tasks. Back home, Chinas interest rate downturn is part of the global economic downturn and monetary easing. Tianfeng Securities said. Source: Daily Economic News Responsible Editor: Yang Zeyu_NF6036
In Ping An Securitiesview, gold prices are expected to continue to rise in overseas asset allocation in the fourth quarter, bond markets will benefit from easy overweights, RMB, Swiss franc and Japanese yen will also benefit from hedging; the US dollar index and US stock market are facing adjustment, emerging market stock market differentiation will continue, and Asian emerging markets supported by economic fundamentals will perform well.
From another point of view, the size of negative interest rate bonds is closely related to the price of gold.
The rise in gold prices, the decline in U.S. Treasury bonds and the increase in the number of negative interest rate bonds around the world tell the same story: In the context of the global economic downturn, monetary policy has to take on more tasks. Back home, Chinas interest rate downturn is part of the global economic downturn and monetary easing. Tianfeng Securities said.