The international gold price once rose by more than $300 this year, can it "soar" again?
Source of this article: Times Business School Author: Lu Shuoyi
Source: Times Business School
Author|Lu Shuoyi
Edited by Sun Yiming
On Wednesday (April 10), the New York COMEX gold main contract once dived high, falling from an intraday high of $2378.10 / ounce to $2337.10 / ounce, down more than $40 / ounce, and closed down 0.65% at $2352.40 / ounce.
However, as of now, the international gold price has risen by more than 10% since the beginning of this year. On April 9, the main gold contract of COMEX in New York rose to $2,384.50 per ounce, up more than $300 from $2,072.70 per ounce at the beginning of the year. In addition, as of the close of April 10, the Shanghai gold main contract was reported at 558.78 yuan / gram, up 16% this year, during which it once rose from the lowest point of 476.32 yuan / gram to 560.88 yuan / gram, up more than 80 yuan / gram.
Affected by the rise in gold prices, A-share gold concept stocks also ushered in a wave of gains.
As of the close of trading on April 10, the Straight Flush Gold Concept Index has risen by 19.25% compared with the beginning of the year, much higher than the increase of the Shanghai Composite Index (1.76%) over the same period. There are a total of 60 constituents of the Flush Gold Concept Index, of which 19 constituents have announced their 2023 results as of April 10, and another 25 constituents have announced their earnings forecasts.
Flush iFinD data shows that among the 44 companies that have announced their 2023 results or performance forecasts, a total of 29 companies have achieved year-on-year growth in net profit. Among them, Zijin Mining (601899. SH) won the "profit king" of gold concept stocks with a net profit of 26.54 billion yuan, and TBEA (600089. SH) and China Molybdenum (603993.SH) followed closely behind, with net profits of 14.093 billion yuan and 8.531 billion yuan, respectively.
The question is, after the gold price has risen by more than 10%, can it continue to "soar"?
In fact, many institutions are still optimistic about the future of gold. Guotai Junan (601211. SH) said in a research report released on April 10 that gold prices will rise in 2024 as the Federal Reserve cuts interest rates. Gold assets have a higher value during Fed rate cuts. Huatai Securities (601688. SH) also released a research report on April 11, saying that gold prices are expected to exceed $3,000 per ounce in this cycle.
However, there are also bigwigs who warn that gold prices may encounter "headwinds". On April 8, Bob Parker, a senior adviser to the International Capital Market Association (ICMA), believed that there are two factors supporting the rise in gold prices this year, one is the depression effect or catch-up effect, and the other is the central bank's gold purchase. However, Bob Parker believes that the strength of the US dollar, rising US Treasury yields and doubts about the Fed's interest rate cut expectations combine to create a pessimistic picture for gold prices going forward.
It should be noted that the minutes of the Fed meeting released in the early hours of April 11 showed that Fed officials are still highly concerned about inflation risks. As early as March 28, Fed Governor Chris Waller also said that the number of rate cuts this year should be postponed or reduced.
After the release of the CPI data that exceeded expectations in the United States on Wednesday, Standard Chartered Bank expects the Federal Reserve to cut interest rates only twice this year, not four, TD Securities also said that it is expected that the Federal Reserve will not start cutting interest rates until September, and China International Capital Corporation (601995.SH) also released a research report on April 9 saying that it lowered its forecast for the number of interest rate cuts by the Federal Reserve to one.
(Full text: 950 characters)
Disclaimer: This report is intended for use by Times Business School clients only. The Company does not consider the recipient to be a client by virtue of receipt of this report. This report has been prepared on the basis of publicly available information that the Company believes to be reliable, but the Company does not guarantee the accuracy or completeness of such information. The opinions, assessments and forecasts contained in this report reflect the views and judgments expressed as of the date of publication. The Company does not guarantee that the information contained in this report will be kept up to date. The information contained in this report may be modified without notice, and investors should pay attention to the corresponding updates or modifications. The Company strives to be objective and fair in the content of the report, but the views, conclusions and recommendations contained in this report are for informational purposes only and do not constitute an offer or solicitation to buy or sell the securities described. Such views and recommendations do not take into account the specific investment objectives, financial situation and specific needs of individual investors and do not constitute private investment advice to clients at any time. Investors should fully consider their own specific circumstances and fully understand and use the contents of this report, and should not regard this report as the sole factor in making investment decisions. Neither the Company nor the author shall be liable for any consequences arising from the reliance on or use of this report. To the best of their knowledge, the Company and the author have no legally prohibited interest in the securities or investment targets referred to in this report. To the extent permitted by law, the Company and its affiliates may hold positions and trade in securities issued by the companies mentioned in the report, and may provide or seek to provide investment banking, financial advisory or financial products and other related services. The copyright of this report is only owned by the Company. Without the written permission of the company, no institution or individual shall infringe the company's copyright in any form such as reprinting, copying, publishing, quoting or redistributing it to others. If the quotation and publication are carried out with the consent of the Company, they shall be used within the permitted scope, and the source shall be indicated as "Times Business School", and this report shall not be quoted, abridged or modified in any way contrary to the original intention. The Company reserves the right to pursue such liabilities. All trademarks, service marks and marks used in this report are trademarks, service marks and marks of the Company.