CEO of the World Gold Council in China: Five factors have driven the gold price to a new high|turn to 101

Gold prices rose in response to the Federal Reserve's interest rate decision on the ground, keeping expectations of three rate cuts unchanged this year. On the 21st, the price of gold quickly rose and broke through $2,200 per ounce, and spot gold once hit a record high of $2,222.29 per ounce.

Wang Lixin, CEO of the World Gold Council in China, said in an exclusive interview with the first financial reporter recently that the prediction of the monetary policy shift of the European and American central banks and the financial fluctuations they are encumbered, the technical support, the strong performance of China and India in the physical gold consumer market, and the rising geopolitical tensions jointly promoted the gold price to a record high.

Wang Lixin said, pass In the past few years, the epidemic has fluctuated as well as the ground margin Politburo force Triggering extreme sanctions or financial controls time There is happening, in the wind and rain Fluttering During the great change, "the investment of gold." capital and the hedging effect is vividly realized Surface appear go out come ”。

In the early morning of Thursday (21st), Beijing time, the Federal Reserve announced its March interest rate decision, and the committee maintained the benchmark interest rate and the forecast of three interest rate cuts this year unchanged. Fed Chair Jerome Powell reiterated his view that interest rate cuts this year, arguing that recent inflation data will not affect the overall trend of price decline.

The Chicago Mercantile Exchange's Fed Watch tool showed that traders' predictions that the probability of the Fed starting to cut interest rates in June climbed to 75%.

Natasha Kaneva, head of global commodities research at JPMorgan Chase & Co., said gold was the first choice in the commodity market and was on track to climb to $2,500 an ounce by the end of the year, given that "the market tends to get extremely excited".

Statistics from the World Gold Council show that the London Bullion Market Association's (LBMA) benchmark gold price in US dollars has grown at a compound annual growth rate of 4.57% over the past 10 years, while the S&P 500 has achieved a compound annual growth rate of 12.84% over the same period. Over the past 10 years, the RMB-denominated Shanghai Gold Exchange's Au9999 Gold has recorded a compound annual growth rate of 6.48%, and the CSI 300 Index has recorded an increase of 7.63%.

It is worth mentioning that on the same day, the three major U.S. stock indexes were refreshed together calendar Historical Collection Intraday high bit currency Standing above $67,000 again - the market field Kamide appear hedging asset risk asset , even speculation asset The spectacle of almost synchronizing new highs.

Wang Lixin said that in the case of a major financial crisis or extreme policy changes, it is not uncommon for asset prices to rise and fall at the same time. "Even if there is a same-fall occurrence, gold is likely to fall the least and take the shortest time to rebound. He added, "For non-professional investors, the biggest taboo in investing in gold is jumping back and forth."

first wealth Pass through: This round of gold prices Rose What are the main factors?

Wang Lixin: There are five main factors: First, the performance of gold prices is mainly guided by the direction of financial and monetary policies of major economies such as the United States and the European Union. Generally speaking, when the Fed enters the channel of interest rate cuts, it will inevitably lead to the weakening of US Treasury yields and the US dollar, and the opportunity cost of investing in gold will fall.

Second, investors will also predict that once the central bank's policy pivot will cause greater volatility in financial markets, thus adding another layer of support to gold.

Third, on a technical level, as gold stood above $2,100 an ounce, long positions increased significantly in major futures markets, including the New York Mercantile Exchange (COMEX), pushing more investors in.

Fourth, usually in January and February every year, especially after the Spring Festival holiday, it is often the off-season for gold sales. However, this year, due to the continued strength and rise of gold prices, the domestic demand for both gold investment products and jewelry products is still relatively strong. In addition, the market in India, another major gold consumer, is also relatively strong, and China and India have provided strong support for the physical gold market.

Finally, the number of major international geopolitical conflicts has increased, which has also highlighted the traditional role of gold as a hedging and security.

first wealth Classic: Year-to-date, city Field pairs to Midland heir of interest rate cut expectations Almost half-. Interest rates time dot forecast Pushed from March late By June and July, interest rates will be cut several times number Reduced from 6 to 3 times. This will give Gold bring forth What fluctuations?

Wang Lixin: As an independent financial asset, it is normal for the price of gold to fluctuate. If there is a significant divergence between the central bank's policy signals and market forecasts, it will have a short-term volatility impact on gold prices.

It is true that as an investor, especially when investing in gold, you should fully realize that gold has a strong independence and a low correlation with traditional financial assets. At the same time, gold is also a non-credit asset. As a result, a variety of factors contribute to the unique role that gold plays in financial portfolios.

We recommend that investors make investment decisions about gold from the perspective of long-term holding and risk diversification, and do not stick too much to short-term gold price fluctuations. The price of gold is also not suitable for speculative products.

first wealth Economy: The current market is gold, the US stock market, and bitcoins currency same create New highs time Generation. How to understand risk aversion asset and risks asset , even speculation asset same Shichuang under calendar What is the record high?

Wang Lixin: Looking at the past 10 years, it is not uncommon for the price of gold to fluctuate at $100 per ounce in the short term. Compared to the prices of other major financial assets, the volatility is not very large.

In general, safe-haven assets play a negative correlation role in most cases. To be sure, history shows that asset prices may fall in tandem under special market conditions, such as major financial crises or extreme policy changes. It is worth mentioning that even if there is a same-fall occurrence, gold is likely to fall the least and take the shortest time to rebound.

Investing in gold should take a long-term view, and don't get too caught up in the fluctuations of gold prices in a few days or a month, and make very panicked decisions. From a non-professional investor's point of view, the biggest taboo in investing in gold is jumping back and forth, and in the end, just donating trading fees. Investing in gold is based on its long-term, stable rate of return. Whether denominated in USD or RMB, the average annual return on investing in gold can reach 6%-8%.

first wealth Warp: In the elimination of gold fee and cast Qualifications What is the role of China and India compared to advanced economies?

Wang Lixin: First of all, China and India are the largest demanders in the global gold market. China and India accounted for more than 55% of global jewellery demand for the full year in 2023.

On the other hand, China and India's demand for gold expertise, including derivatives, cannot be compared to their share of the jewellery and spot markets. Therefore, there is still a lot of room for expansion in the development of financial markets between the two countries. Although the per capita income level is not as high as that of advanced economies, the younger generation of consumers will have more room to grow as the economy develops.

In addition to fundamental supply and demand, the international gold price is more affected by finance and geopolitics, so China and India do not play a significant role in this area. At the level of gold ETFs, North America is still the largest market, followed by Europe, and Asia is only a fraction of the total of the United States. Therefore, in the field of professional investment, China's influence still has a lot of room for development.

first wealth Meridian: Accompanying ground margin Politburo force No break Change, globalization enter Cheng was picked war , the central banks of several countries in recent years come Also pass pass Increase holdings of gold, throw Sold in the United States Debt comes true appear Diversified configurations. this One Zhao Ling Whether will continue ？

Wang Lixin: The increase in the central bank's gold reserves has also played a huge role in supporting the physical level of gold. The purpose of the central bank's gold reserve is to diversify the reserves and change the composition of the dollar's dominance.

Since the 2008 financial crisis, including the epidemic fluctuations and geopolitical situation in the past few years, the investment and hedging role of gold has been vividly demonstrated during the turbulent changes of the past decade.

Based on the needs of long-term construction, the financial products of the central bank's reserves need to meet the dual requirements of security and liquidity. Coupled with the transparency and standardization of gold's price and trading, central banks still regard gold as an important part of central reserves.

The World Gold Council's biennial survey of central bank reserve managers shows that most central bank reserve managers believe that the trend of reserve diversification will continue and that gold reserves will increase, including in both developing and advanced economies.

first wealth Pass through: Right to ordinary casts capital What is the builder? discuss ？

Wang Lixin: First of all, gold investment should focus on the long term. Secondly, investors who do not have much experience are strongly advised to avoid leveraged investment products. Third, pay attention to third-party risks, and identify formal institutions when investing and buying gold.