Precious metals continue to rise, suddenly rise and fall, the bull market is over?

(1) This week's views

We know that under normal circumstances, the trend of gold futures mainly revolves around the three main lines of US inflation, European and American economic levels and the stability of the financial system, and gold is usually regarded as a safe haven.

2023 is considered a year of significant success for gold

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Gold achieved a return of more than 14%. Although gold was under pressure last year due to strong U.S. economic data and concerns about further interest rate hikes by the Federal Reserve, U.S. Treasury rates and the strength of the U.S. dollar; But

Gold demand is intense

The increase can be attributed to geopolitical tensions in the Middle East, as well as expectations that the Federal Reserve will slow down its tightening of monetary policy this year.

As gold is a hedge against inflation and political and economic uncertainty, the rise in inflation is supported by high inflation, an election year and geopolitical uncertainty in the Middle East and Europe.

Gold has hit several all-time highs since mid-February. Heightened geopolitical risks, including in the Middle East and Ukraine, as well as central bank purchases of gold, contributed to the rally.

The surge in gold prices has triggered a domino effect

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Since March, silver has even risen more than gold, and spot silver prices have risen by more than 20% so far this year.

远远好于现货黄金15.4%的涨幅。

Since October 2023, the absolute value of global gold reserves has generally shown an upward trend, which has supported the rise in gold prices in the past six months. At the same time, the global consumption of gold jewellery increased significantly in the fourth quarter of 2023, which also supported the rise in gold prices in October-December last year.

Gold bucked the trend and approached $2,400 an ounce despite a rapid decline in market expectations for how much the Fed could unwind, as strong economic reports suggest inflation could return if the Fed cuts borrowing costs too soon.

Global financial markets have shown a surprisingly stable posture after a rare Iranian attack on Israel. While tensions in the Middle East remain tense, traders appear to be keeping a high level of concern about the aftermath of the incident. After Iran's attack on Israel, the situation in the Middle East showed a temporary calm, but market sentiment fluctuated wildly, gold experienced a "roller coaster" market, and investors need to be wary of whether the conflict between Iran and Israel will escalate further, as this will not only affect risk aversion, but also one of the main factors affecting future inflation. Recently, Fed official Collins said that there is no urgency to cut interest rates in the short term, and the timing of interest rate cuts will be later than previously expected.

For the gold market, Xiao Chu believes that gold has entered the overbought area, and the gold market has undergone a fundamental turning point recently, and the probability of falling back is relatively large. Therefore, it is recommended that everyone wait and see, and it is better for activist investors to take advantage of the high and short. Personal opinion, FYI!

(2) Market review

Last week, the international gold price opened at 2343.6 US dollars / ounce, the highest price was 2448.8 US dollars / ounce, the lowest price was 2321.7 US dollars / ounce, and the closing price was 2360.2 US dollars / ounce, up 11.1 US dollars, or 0.47%. It is the fourth consecutive week of gains.

In the past week, the main domestic Shanghai gold futures contract opened at 545.58 yuan/gram, the highest price was 570.56 yuan/gram, the lowest price was 543.28 yuan/gram, and the closing price was 570.5 yuan/gram, up 28.98 yuan/gram, or 5.35%.

The main opening price of silver was 6879 yuan/kg, the highest price was 7479 yuan/kg, the lowest was 6802 yuan, and the closing price was 7472 yuan/kg, an increase of 10.03%.

Domestic precious metals rose and fell back on Monday.

(3) Fundamental dynamics

(1) Weekly news:

Gold futures hit a record high for the second straight session on Monday as central banks aggressively bought and geopolitical tensions triggered safe-haven inflows. Despite the strong economic data, it did not diminish gold's appeal. Silver also hit a new high in nearly three years.

On Monday, it was reported that China's central bank increased its gold reserves by 160,000 ounces in March, marking the 17th consecutive month of increasing its gold reserves. Central banks in Turkey, India, Kazakhstan and some Eastern European countries have also been buying gold this year.

Gold futures hit another all-time high on Tuesday, driven by momentum fund buying and geopolitical risks. At the same time, the focus shifted to the minutes of the Fed's policy meeting and inflation data, which could provide clues to the Fed's interest rate policy outlook.

Bank of America analysts said in a note on Tuesday that gold could rise to $3,000 an ounce by 2025. The investment bank predicts that silver prices will break above $30 an ounce in 2025, benefiting from higher gold and stronger industrial demand over the next 12 months.

Global gold-backed ETF outflows continued in March (down by $823 million), but at a much slower pace than in previous months, according to the World Gold Council. In March, global gold-backed ETFs saw their total AUM rise by 8% on the back of stronger gold prices, despite a further decline in global gold-backed ETF holdings. In the first quarter of this year, global gold-backed ETF outflows reached US$6.5 billion.

Gold futures on the Chicago Mercantile Exchange (COMEX) retreated from record highs on Wednesday as U.S. inflation data beat expectations, denting expectations of a rate cut by the Federal Reserve, and the dollar and U.S. Treasury yields strengthened.

The dollar index surged more than 1% after the release of U.S. inflation data on Wednesday, reducing gold's attractiveness to buyers holding other currencies; U.S. Treasury yields have surged, raising the opportunity cost of holding non-interest-bearing gold.　　

The U.S. Labor Department's Bureau of Labor Statistics said on Wednesday that the U.S. consumer price index rose 0.4% month-on-month in March, higher than economists' expectations of 0.3%; In the 12 months to March, the CPI rose 3.5%, higher than economists' expectations of 3.4%.

Gold futures hit an all-time high on Thursday as a weaker-than-expected U.S. producer price index (PPI) boosted the prospects for U.S. interest rate cuts this year. Ongoing geopolitical concerns have also helped to make gold more attractive to investors.

The U.S. Labor Department reported on Thursday that the producer price index rose 0.2% month-on-month in March, compared with economists' expectations of a 0.3% increase. Gold prices rose as the director of metals trading at the U.S. company Herich Futures said that the producer price index was a little lower than expected, which means that the Federal Reserve is still likely to cut interest rates before the end of the year.

Gold futures hit another all-time high on Friday, the fourth straight weekly gain, as rising tensions in the Middle East prompted investors to pour into safe-haven assets.

On Friday, the White House said that an imminent Iranian attack on Israel was a real and tangible threat, though it did not disclose the likely timing of the attack. Western intelligence sources Iran could launch an attack on Eliza's government target as soon as 48 hours in retaliation for an Israeli airstrike on the Iranian embassy in Syria earlier this month, and Iran's top religious leader vowed on Wednesday to retaliate against the Israeli attack.

(2) Gold ETFs and the U.S. Dollar Index

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As of April 12, it decreased by 4.03 tons from the previous day, and the current position is 826.72

Ton.

We know that the US dollar and gold, as global safe-haven tools, have a strong mutual substitution relationship, and in the medium and long term, the two show a negative correlation. Because gold is denominated in US dollars, the strength of the dollar index has made gold more expensive for overseas investors, and the rise in the dollar has also weakened gold's appeal to buyers holding other currencies.

In the past week, the U.S. dollar index has rebounded and rebounded. The opening price of the week was 104.29, the intraday high was 106.11, and the low was 103.87; It ended the week at 106.02, up 1.67%.

Important: The information contained herein is derived from publicly available information and is not guaranteed to be accurate or implied in terms of accuracy, reliability, timeliness and completeness. The views and information published in this article are for investors' reference only and do not constitute investment advice to anyone. The risks and returns of futures are relatively large, please participate cautiously, sincerely apologize for the inconvenience caused to you, thank you for your understanding and cooperation!