Although the impact is largely psychological, it is likely to trigger short-term panic selling by domestic investors. An institutional source told the Chinese correspondent of the securities company. Just before that, six banks, including ICBC, ABC, BOC, CCB, BOCOM and CMB, gave risk tips on precious metals in their accounts and suspended the opening of new customers with similar accounts. And the news is now fermenting.
Precious metal night trading period suddenly plummeted
At 21:00 p.m. Beijing time on the 27th, the global precious metal market suddenly and rapidly dived after the domestic commodity night trading session began. The international gold price fell below 1800 US dollars / oz, down nearly 2%; silver fell even more, once more than 4%. The domestic market is basically synchronized with that of overseas markets, and the related varieties of Shanghai Gold Exchange and Futures Exchange have declined to varying degrees.
After about 22:00, the decline of precious metal market gradually narrowed, but the decline was not significantly reversed until the next days closing.
Why did the highly respected precious metal market suddenly plummet? Industry insiders believe that it may be related to the latest policy of major domestic banks to suspend new accounts for precious metals.
Other institutions also told reporters that although it does not involve the account of precious metal stock business, but the suspension of new account opening will have a greater psychological impact on existing investors, and the market is prone to misread the relevant policies. As most investors hold long positions in precious metals, short-term concentrated closing positions will cause greater selling pressure in the market, which will lead to panic drop.
On November 27, six banks, including ICBC, ABC, BOC, CCB, BOCOM and CMB, made risk warnings on precious metals in their accounts and suspended the opening of new customers of similar accounts.
Taking China behavior as an example, the bank issued a notice saying: the bank will suspend the signing service of acting as an agent for individual Shanghai gold exchange business and two-way account precious metal products from November 28, 2020, and the normal trading of signed customers will not be affected. It is suggested that you should pay attention to the relevant risks brought by market changes in a timely manner, reasonably control positions and invest rationally.
It is worth noting that many banks suspended the opening of new customers accounts and controlled incremental customers, and did not propose when they would restart. Previously, banks only gave more risk tips on market fluctuations. However, many banks announce the same operation at almost the same time, and unified action is rare. After the crude oil treasure incident, a number of banks, including state-owned banks and joint-stock banks, announced the adjustment of relevant account transactions within a few days. Since then, there has been no unified action of so many banks.
Some relevant people said that the industry has always expected policy changes in the precious metal business of bank accounts. At present, it is unlikely to restart new account opening in the short term. Therefore, it is necessary to formulate an investor suitability system for relevant businesses to prevent risks.
Despite the recent continuous adjustment of the precious metal market, the industry still seems optimistic about the trend of precious metals, especially gold.
After the event is stable, the market will return to fundamental trading. The medium and long-term gold trend is not pessimistic, and the rising cycle has not ended. Mainly in the post epidemic era, the recovery of the US economy still needs fiscal stimulus policy, while the monetary policy of the Federal Reserve will remain loose to maintain a low interest rate environment. 2021 is expected to adjust the structure of asset purchase and increase the purchase of long-term bonds. The logic of low interest rate and weak dollar supporting golds rise is still in place, and gold will still break through the previous high in 2021. Xu Ying said.
Paul Robinson, general manager of CRU, recently said that there will be enough volatility and uncertainty in the whole market to boost gold prices next year, and it is expected to return to above $2000 / oz in the next three to six months. Robinson pointed out that the gold market fundamentals are very strong and there is strong support in the first half of next year. Gold will remain the best performing commodity in the first half of next year, followed by copper, other precious metals and nickel and zinc.
However, novel coronavirus pneumonia is also likely to be gradually released from the global economy next year. The risk of rising market risk preference and interest rate will bring some pressure to the precious metal market.
This article is from Guo Chenqi, editor in charge of securities companies in China_ NBJ9931