On the morning of July 27, Beijing time, London spot gold continued to soar after breaking through $1920 / oz, and rose 3.08% to 1944.48 USD / oz, a record high.
As of press release, spot gold was reported at US $1943 / oz, up more than 2% within the day.
In todays A-share market, gold and jewelry concepts soared, with more than one stock floating red.
Why did it soar?
Higher risk aversion and lower interest rates
So what are the factors supporting golds rising this year? Can gold price break through the highest in the future market and climb a new peak?
In addition to the above risk factors, one of the main factors driving gold is the downward real interest rate.
One reason why gold can continue to rise is that the opportunity cost is low. The current low interest rate environment is good for interest free assets such as gold. As long as the price of gold rises, there will be better income. The second point is that if the current global monetary policy remains loose, the value of the currency will fall, and gold has the traditional function of preserving value Wang Xinjie, chief investment strategist at Standard Chartered China wealth management, told the 21st century economic report.
Mark Mobius, the father of emerging markets, said recently that he would continue to be bullish on gold. When the interest rate is zero or close to zero, investors need not worry about holding interest free assets like gold. As uncertainty continues to rise, gold prices will continue to rise, I will continue to buy gold, gold is experiencing a big rise. He said.
In addition, the weakening dollar is also a major factor in boosting the attractiveness of gold,
This helps to reduce the cost of holding gold for non US investors. At present, the US dollar index has fallen to its lowest level in two years. Recently, the US dollar index has fallen below 94 for the first time since September 26, 2018.
As for the US dollar, Wang Xinjie said it was bearish in the medium term, because US interest rates are expected to remain low until 2022 and continue to supply large-scale US dollar liquidity, the US dollar is expected to continue to weaken.
In a recent comment, mark haefele, chief investment officer of UBS wealth management, predicted that the tense political situation would continue to push gold up in the year, with a potential impact of $2000 / oz.
Whats more, the Bank of America raised its gold target price for the next 18 months to $3000 an ounce in April.
Organization: these two things are also incentives
In addition to the above reasons, the Research Report of the eastern stock exchange futures pointed out that there are two things worth paying attention to.
Second, Sino US relations are tense. The United States closed the Chinese Consulate General in Houston and China closed the US Consulate General in Chengdu as a counterattack. As a result, the market sentiment of risk aversion was higher, the risk assets were lower, and the funds flowed to the safe assets bonds and gold.
In addition, the continued increase of ETF holdings and the recovery of gold speculative net long positions indicate that funds are more bullish on gold.
According to the analysis of the researchers from the macro strategy group of Donghai Futures Research Institute, from the perspective of news, the new crown epidemic is repeated, the number of US unemployment is still high, and the economic outlook is highly uncertain. It is expected that the Federal Reserve will maintain long-term zero interest rate and quantitative easing policy. In the environment of expanding fiscal policy and loose monetary policy, inflation expectations gradually increased.
Chinese aunt who bought gold seven years ago laughed
Make at least $5.5 billion!
At this time, Chinas aunt quickly into the market, copy the bottom price of gold. But this wave of bottom copy was copied on the hillside.
Later, the aunt seemed to disappear, but gold prices have been rebounding.
According to some data, they bought 300 tons of gold at an average price of about $1300 an ounce, which even held the market for a short time and made the gold price rebound.
What is the concept of 300 tons? According to the World Gold Council,
As of July this year, Chinas gold reserves were 1948 tons. Today, Chinese aunts hold 15% of Chinas gold.
So, in todays soaring gold price, if the aunt sells now, how much can she earn?
In addition to these two days of increase, the amount can be imagined.
Not only gold, but also silver.
In the past five trading days, the international silver price has risen by more than 15%.
On July 27, the spot silver price rose sharply, and the intraday increase expanded to 7%. By the time of publication, it was at US $24.20, climbing to the highest level in recent seven years.
Relevant analysis shows that silver follows the rise of gold,
According to the research report issued by China Thailand securities on July 22, silver has both financial and commodity attributes, and commodity attribute is the core driving force for the recovery of the gold silver ratio. Therefore, the recovery of the gold silver ratio often occurs in the early stage of economic recovery (i.e., the second stage of the upward cycle of precious metals), during which silver has obvious excess returns.
The above research report also pointed out that the latest repair of gold silver ratio occurred from February 29, 2016 to July 14, 2016, with the repair cycle of 136 days. The gold silver ratio was revised down from 83.20 to 65.79, with a change of 20.93%. During this period, the gold price increased by 8%, and the silver price increased by 36%.
Citigroup last week forecast that silver prices will exceed $25 / oz in the next six to nine months, with the most optimistic scenario of breaking through $30 / oz.