The gold market is changing, and on April 12, the international gold price once hit the $2,400 mark, but staged a thrilling dive. London spot gold and COMEX gold futures closed down, causing a lot of shock to the market. Affected by this, domestic gold jewellery prices fell the next day, and the prices of pure gold jewellery of well-known brands such as Lao Fengxiang and Chow Tai Fook all declined.
This roller coaster ride in gold prices actually stems from a series of recent economic data releases and statements by Federal Reserve officials. First of all, the US CPI data was released, which was higher than market expectations, which made the market doubt the possibility of the Fed cutting interest rates in June. However, the subsequent US PPI data showed a slower-than-expected growth rate, which provided some support to gold prices. But just when the market thought that gold prices would continue to rise, the statements of a number of Fed officials poured cold water on gold. They have said that the Fed will cut interest rates later than previously expected, and this news directly led to a plunge in gold prices.
There are also different views in the industry on the skyrocketing price of gold. Some people believe that the rise of gold and the US dollar reflects long-term concerns about the credit of the US dollar, and the continuous purchase of gold by global central banks is also seen as an important factor affecting the trend of gold. However, some economists have pointed out that it is unlikely that the gold standard will return, and the performance of gold prices is more affected by the cyclical performance of the US dollar and the cyclical fluctuations of the risk-free interest rate.
Industrial Securities pointed out that there are differences between the general public and professional investors in the perception of the value of gold investment, and global central banks will also weigh costs and risks when allocating gold. Despite this, the recent record size of gold-backed ETFs shows that investors' enthusiasm for gold remains unabated.
The Shanghai Gold Exchange also issued a risk warning in a timely manner, increasing the trading margin ratio and price limit of gold deferred contracts, and reminding investors to do a good job of risk prevention. In this context, investors should perhaps look at the volatility of the gold market more rationally, reasonably control their positions, and avoid blindly following the trend.
Overall, the gold market is full of opportunities, but it also comes with risks. While pursuing returns, investors should pay more attention to risk control and management. After all, only a sound investment strategy can be invincible in the storms of the market.