So far this year, the international gold price has risen by more than 25%. The Chinese aunt who snapped up gold seven years ago is now not only breaking loose, but also proud of the world
Witness history! Gold breaks record
A-share related plate all red
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.
It broke the record of US $1921.17 set in 2011.
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.
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?
On the one hand, with the outbreak of the new crown, the haze of the global economic outlook is difficult to disperse in a short time. Such risk aversion has continuously pushed up the price of precious metals represented by gold.
In addition to the above factors, the real interest rate is driving the downward trend.
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.
Gold is the mainstream of the market. Last week, 14 Wall Street professionals took part in the kitco news gold weekly survey, of which 11 (79%) expected gold prices to rise. Two analysts (14%) predicted that prices would fall. At the same time, one analyst (7%) expects prices to fluctuate laterally.
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.
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.
According to the economic daily, in April 2013, the international gold price had a rare sharp drop in history. By the end of May 2013, the gold price had dropped to 1386.4 US dollars / ounce.
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.
Since then, the international gold price has been falling all the way. By the end of 2015, the international gold price reached 1060.24 US dollars / oz, that is to say, the loss margin of Chinese Dama who bought gold in April 2013 was about 30%.
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?
According to Tencent Financial estimates, as of 24:00 on July 22, London time, the international gold price was 1870 US dollars / ounce. That is to say, if the aunt does not sell during the seven years of fluctuating gold prices, excluding other trading factors,
In addition to these two days of increase, the amount can be imagined.
Silver also counter attack, 7 years high!
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,
As the price of gold continues to rise, once the gold silver ratio (the price ratio of gold and silver) becomes unreasonable, there will be an accelerated flow of funds into silver. On the other hand, the price of silver is supported by industrial demand.
Minsheng Securities Research Institute believes that from the historical data, the average value of gold and silver price ratio is 57. When it deviates from the average value substantially, the mean value will be returned. The repair of gold silver price ratio is completed by the increase of silver price exceeding that of gold price. At present, as the economy enters the recovery stage, the physical demand for silver (including industry and investment) will gradually recover, and the upward window of silver price is expected to open.
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. Ma Huateng has made a big purchase! The input method used by Chinese netizens has soared by 7 billion yuan. The first share of the registration system on the gem has come: and these new shares are waiting to be issued and shrink by 200 billion in half a year! The worlds largest hedge fund laid off dozens of employees_ NF5619
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.