On the 17th, topics such as #金价# #金饰价格一夜冲到超750元每克# appeared on the hot search, and the price of gold rose sharply again, attracting the attention of netizens.
On the 17th, Chow Sang Sheng's official website showed that the price of pure gold jewelry reached 754 yuan/gram; According to the official website of Chow Tai Fook on the 17th, the price of pure gold jewelry was 753 yuan/gram, up 18 yuan/gram from the previous day; According to the customer service of the official flagship store of Caibai Jewelry, on the 17th, the price of pure gold 999 jewelry was 756 yuan / gram.
Screenshot of the brand's official website
Why is gold soaring?
On July 17, the London spot gold price closed above the $2,478 / ounce mark, breaking the high set at the end of May, and once opened as high as $2,482.24 / ounce.
Gold prices began to surge in early March this year, hitting a stage high of $2,135 an ounce on March 7 and starting a correction when it broke through $2,401.5 an ounce on April 12. Subsequently, in June, gold prices weakened due to multiple factors, briefly falling below $2,300 per ounce.
Industry analysts believe that the recent continuous rise in gold prices is mainly driven by unexpected events. "On the one hand, the shooting of former President Trump United States driven the market's risk aversion, and on the other hand, the CPI data released by United States recently exceeded expectations and also drove the market's expectations for the Fed to cut interest rates this year, and some institutions even expect the Fed to cut interest rates three times this year." Gold market analyst Cheng Wei said.
In addition, the UBS report also pointed out that there has been a general interest in buying gold dips recently, which may also be one of the reasons for the rapid market rally. UBS also said that global geopolitical risks have boosted central bank interest in gold, which is now buying the highest amount of gold since the late 1960s.
On the consumer buying side, demand for gold also continues to be strong. In the domestic market, unlike the continuous decline in global gold-backed ETF holdings, investors in the Chinese market continued to increase their holdings of gold-backed ETFs, with gold-backed ETFs in the Chinese market inflowing about RMB1.8 billion in May, achieving positive growth for six consecutive months. According to the World Gold Council, by the end of May, the total assets of gold ETFs in the Chinese market reached 48 billion yuan, a record high.
According to the World Gold Council, from the beginning of 2024 to the end of June, the spot price of gold has risen from about 460 yuan/gram to more than 540 yuan/gram, an increase of 17%. The price of gold jewelry of various brands has also risen, with many exceeding more than 700 yuan a gram, an increase of more than 10%.
How is the price of gold moving?
After a rapid rally in the morning, gold prices fluctuated to a certain extent in the afternoon. Looking ahead, how will gold prices perform next?
According to the Associated Press, the current market focus is on whether the Fed will cut interest rates in September, which will have an important impact on gold prices.
UBS Wealth Management's Chief Investment Office pointed out that since March this year, some advanced economies have begun to cut interest rates. Although the United States missed the wave of interest rate cuts in the first half of the year, inflation has shown a clear downward trend in recent months, with core CPI only slightly increasing by 0.1% month-on-month in June, and the market expects the probability of a rate cut in September to rise from around 70% before the CPI data to about 90%.
"Gold, as a non-interest-bearing asset, will benefit from interest rate cuts, and it is also one of the best tools to hedge against uncertainties such as the United States election, geopolitics, and the United States deficit," said UBS Wealth Management's chief investment officer's office, adding that continued central bank buying will also support gold prices, which are expected to rise to $2,600 an ounce by the end of the year.
Guohua gold analyst Wang Yi said that spot gold has been supported in the context of the decline in the dollar, as for whether gold prices can further rise and break through the flag pattern, the key is whether the dollar index can break through the 104 level downward, and the possibility of the Federal Reserve cutting interest rates in September. Since the flag pattern in the gold daily chart is moving upward, the resistance level has extended to $2480.
"The Federal Reserve is expected to cut interest rates in September-December, and if gold breaks through $2,480, it will open up a new upside. According to the calculation of the upward breakout extension ratio, the maximum rise in gold prices can be seen as high as $2,660, and the primary condition is to break through the 2,480 resistance level," Wang Yi predicted.
However, some analysts remain cautious about $2,600, believing that gold prices have been overvalued this year. Zhao Qingming, vice president of the Institute of Information Technology, believes that looking back at history, the gold price has been overvalued. It is more likely that the price will exceed $2,500 per ounce this year, and the $2,600 per ounce level is currently in doubt. At the same time, it does not rule out the possibility that gold prices will be affected and pull back to $2,000 per ounce.
"Looking ahead, considering geopolitical risks and the continued quantitative easing of the world's major central banks, the general trend of gold prices is still up. But this kind of rise is not very flat, all the way up, there should be some fluctuations, and even at a certain stage there will be a significant pullback," Zhao Qingming said.
How much room is there for investment?
Now, gold prices are strengthening as expectations of Fed rate cuts rise. According to Choice data, many products such as Yongying CSI CSI Shenzhen-Hong Kong Gold Industry Stock ETF, ChinaAMC CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, ICBC UBS CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, and Huaan CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF have risen by more than 10% since July.
Against the backdrop of the current global economic challenges, the performance of the gold market undoubtedly provides a safe haven for investors. However, we also need to recognise that a sustained rise in the gold price does not imply unlimited growth. Wang Qing, chief macro analyst of Oriental Jincheng, pointed out that it may be too early to conclude that the international gold price has entered a new long-term rising process, and the international gold price trend in the later period is facing at least two uncertain factors. First, if the Federal Reserve starts to cut interest rates in the second half of the year, the upward momentum of international gold prices may slow down under the effect of "expected fulfillment". More importantly, even if the Fed turns to cutting interest rates in the future, the US dollar interest rate will remain high for a long time, which means that with the decline in inflation, the real interest rate of US bonds will continue to be in a high positive state, which is more likely to cool down the international gold price. Second, if the domestic real estate industry achieves a soft landing in the second half of the year, the demand for gold purchases from China will slow down significantly.
When investors participate in gold investment, they still need to remain rational, pay attention to market changes, and allocate assets reasonably. It is also necessary to be alert to possible price fluctuations and do a good job of risk management.
(The views in the article are for reference only and do not constitute investment advice, investment is risky, and you need to be cautious when entering the market.) )
Synthesized from CCTV Finance, China Economic Net, Finance Associated Press, Shanghai Securities News, Meijing, Beijing Business Daily, etc