Last week, after the gold price bottomed out and recovered, it fluctuated for three days in the range of 1720-1730 US dollars / ounce, and finally broke out on Friday, rising more than 20 US dollars, once again approaching the years high of 1750 US dollars. Gold prices rebounded sharply on Monday, with spot gold rising more than $15 to close at $1760.
Wang Xiang, fund manager of Boshi gold ETF, said that gold continued to maintain strong strength, mainly due to the impact of the Federal Reserves expectation of long-term easing commitment and the geopolitical situation. In recent interest rate resolution conferences and other speeches, Federal Reserve Chairman Powell repeatedly mentioned that he is still cautious about the stability of the US economic recovery and will maintain loose monetary policy support for a longer time.
On Monday, gold prices continued to rise, a medium-sized public fundraiser in South China said, because of concerns that the second spread of the new crown epidemic may force governments to implement new blockade measures, at the same time, it is expected that the global central bank will continue to implement ultra loose monetary policy to support the economy for some time, and the risk aversion mood will rise again.
As the gold price shocks higher, gold ETF performance also rose. As of last Friday, the net value of the four gold ETFs has grown by more than 14% this year.
Since the second quarter, the fluctuation of gold price has increased, and the scale of the above four gold ETFs has increased by 15.71%. Among them, the scale of e fund gold ETF increased by 22.6%, and that of Boshi, Huaan and Guotai increased by 17.7%, 15.71% and 5.36% respectively.
Internationally, data shows that as of June 19, the total positions of the eight major global gold ETFs were 1912.85 tons, an increase of 356.62 tons compared with the end of last year, an increase of 22.92%.
Industry insiders pointed out that the current epidemic situation still plays a leading role in the strengthening of gold price, while the trend of gold price is affected by factors such as the fluctuation of US dollar exchange rate.
Cathay Pacific Fund said that in the short term, the US nominal interest rate level has reached a historical low, and the federal fund interest rate has reached a historical low range of 0-0.25%. If the Fed does not adopt a negative interest rate policy, the US nominal interest rate has limited space to fall. Affected by the epidemic, the economic outlook is bleak, and the upside space of nominal interest rate is also limited. The short-term factors affecting gold have shifted to changes in inflation expectations. In the medium term, as the oil price gradually stabilizes and the epidemic situation in Europe and the United States approaches the turning point, the market inflation expectation is expected to pick up, driving the real interest rate level down, and the comparative advantage of gold is expected to be highlighted.
Cathay Pacific Fund believes that gold has a strong allocation value at present. In the case of frequent global risk events, golds hedging value may be highlighted. Adding gold to the portfolio can effectively reduce portfolio volatility. Domestic gold can effectively hedge the depreciation of RMB against the dollar. In the medium and long term, the risk of global economic recession is gradually increasing, the scale of global negative interest rate bonds continues to rise, and gold may gradually usher in opportunities in the large cycle.
Wang Xiang believes that Powell took over the environment of economic weakness and structural problems, and was in the late stage of a round of interest rate hike by the Federal Reserve, so he chose a relatively lagging policy path, and finally gave gold a chance to stabilize and strengthen. From this point of view, the large adjustment space of gold has been closed. In addition, the situation in some regions is volatile, which is likely to continue to intensify in the context of the US election, and promote the safe haven demand for gold. It is worth mentioning that Goldman Sachs recently raised its 12-month gold price forecast by 11% to $2000 / oz on the basis of low real interest rates and concerns about currency devaluation. It is believed that no matter what the long-term consequences of inflation and so on, stimulus measures will continue to be introduced all over the world, which will become the key factor to support the gold price in the long term. Source: responsible editor of Securities Times: Yang Bin_ NF4368
It is worth mentioning that Goldman Sachs recently raised its 12-month gold price forecast by 11% to $2000 / oz on the basis of low real interest rates and concerns about currency devaluation. It is believed that no matter what the long-term consequences of inflation and so on, stimulus measures will continue to be introduced all over the world, which will become the key factor to support the gold price in the long term.