Chinanews.com, April 13 (Zhongxin Financial Reporter Zuo Yuqing) Gold has fallen!
On April 12, the international gold price that once broke through the $2,400 mark plunged intraday, with spot gold in London closing down 1.25% at $2,343.29 per ounce and COMEX gold futures closing down 0.53% at $2,360.2 per ounce.
Affected by this, on April 13, the price of domestic gold jewelry fell, the price of Lao Feng Xiang pure gold jewelry was 737 yuan/gram, and the price of pure gold jewelry of Chow Tai Fook on the same day was 736 yuan/gram, down about 10 yuan/gram from the previous day.
International gold and silver closing prices on April 12.
What happened?
From April 10th to 12th, the price of gold, which had previously maintained an upward trend, sat on a roller coaster.
On the evening of April 10, the latest CPI data, the most critical inflation data before the Federal Reserve's May decision, was released. U.S. CPI rose 3.5% year-on-year in March, higher than market expectations of 3.4%, which means that the likelihood of a Fed rate cut in June is reduced.
After the release of the data, international gold and silver prices fell briefly. However, the year-on-year growth rate of 2.1% in the US PPI in March announced on the evening of the 11th was slightly lower than expected, and the month-on-month growth rate slowed to 0.2% more than expected, making gold and silver "rebellious" again.
From April 11th to 12th, the international gold price returned to an upward trend. On the 12th, COMEX gold reached a maximum of $2448.8 per ounce, while London spot gold once reached $2431.78 per ounce, both hitting record highs.
However, just as COMEX gold and London spot gold both broke through the $2,400 mark, a number of Fed officials said that the rate cut would be later than previously expected.
Fed official Collins said the Fed is now expected to cut rates a little later than previously expected. Fed official Goolsbee pointed out that the United States is in a contradictory environment, the Fed must bring inflation down to the target level, and many inflation data are higher than expected, and he does not want to impose restrictions on what the Fed may do in future meetings; Fed official Daly believes that the Fed is currently moving towards the goal of reducing inflation to 2% as modestly as possible, and there is no urgency to cut interest rates.
The voices of Fed officials caused the resurgent rise of gold to dive at a high again. Spot gold rose nearly 2.5% during the session, but then plunged sharply, falling 1.25% to $2,343.29 an ounce, while COMEX gold futures rose more than 3% during the session to close down 0.53% at $2,360.2 an ounce.
Data map: The formed gold bars are cooled in water.
Gold surge deviates from "common sense"?
It is worth mentioning that the previous surge in gold was seen as a deviation from "common sense".
Some people in the industry believe that gold and the U.S. dollar rarely "compete" together, reflecting the long-term credit concerns of the U.S. dollar.
In January this year, the U.S. Treasury Department released a report that the total U.S. national debt reached $34 trillion for the first time, five years earlier than the Congressional Budget Office's previous forecast. Some foreign media pointed out that this indicates that the United States will face political and economic challenges in improving its balance sheet in the coming years.
The expectation of interest rate cuts in the United States is also not convincing: since 2023, the frequent downward revision of the US non-farm data and the impact of part-time jobs on the data have reduced the market's trust in the non-farm data;
In addition, in the context of geopolitical influences and high interest rates, the continuous purchase of gold by global central banks is also seen as an important factor affecting the trend of gold.
The fixed income team of Huatai Securities believes that the central bank's gold purchase behavior not only reflects the recognition of gold's safe-haven attributes, but also shows concerns about the stability of the traditional monetary system in the case of the continuous expansion of the Fed's balance sheet.
So, does this mean the "collapse of the dollar credit system"?
Economist Pan and Lin told China News Finance that the US dollar will still maintain its status as an international currency for a long time in the future. "There is no possibility of a return to the gold standard, so the price of gold behaves in a cyclical way in the US dollar and is subject to cyclical fluctuations in the risk-free rate. ”
Data map: Customers buy gold jewelry Photo by China News Service reporter Luo Yunfei
To buy or to sell?
"Gold will prove itself" - this is a joke from gold holders, but how much upside does gold have after a "violent" pullback?
Industrial Securities pointed out that the general public accounts for a relatively high proportion of gold investors, and professional investors and the public are differentiated in the perception of gold investment value. Global central banks will consider the value of gold with political considerations, but if the price of gold deviates too much from the actual value, central banks will also consider the cost and risk of allocating gold.
Zhongxin Finance noted that although gold prices have fluctuated in the short term, the scale of many gold ETFs such as Huaan Gold ETF, Bosera Gold ETF, E Fund Gold ETF, and Cathay Gold ETF has hit a record high. Third-party data shows that from March 1 to April 12, gold ETFs and gold stock ETFs attracted a total of more than 12 billion yuan.
On April 12, the Shanghai Gold Exchange issued an announcement announcing the increase in the trading margin ratio and price limit of gold deferred contracts, as well as the margin of performance guarantee inquiry contracts. At the same time, investors are reminded to do a good job in risk prevention, reasonably control positions, rational investment, and ensure the stable and healthy operation of the market.
Pan and Lin believe that the Fed is more likely to postpone the interest rate cut at present, but the persistence of gold prices to continue to rise still exists, because although the Fed may delay the rate cut, it is inevitable that the interest rate will peak. (ENDS)