The price of gold is on a "roller coaster", can it still be bought now?

The country is a through train

2024-04-24 19:08Posted on the official account of Shandong China News Service's "Guoshi Through Train".

Text/Li Xiaoyu

The gold price has been on a rollercoaster ride lately.

Following the previous sharp rise, on April 22, the international gold price suddenly plummeted, down nearly 2.8%, including the stock market gold concept stocks also plummeted; on the 23rd, spot gold once fell to the lowest in more than two weeks; on the 24th, as of press time, the Shanghai Gold Exchange gold T+D rose to about 547 yuan per gram, but the international gold price spot gold is still falling.

Why is gold price more volatile?

Since March this year, international gold prices have begun to soar.

On February 29, spot gold in London closed at $2,043.99 an ounce. Since then, the price of gold has started to rise rapidly, reaching $2,195.07 an ounce on March 8. From mid-to-late March, the international gold price fluctuated steadily.

Starting on March 28, the London spot gold price soared again, rising to $2,431.41 an ounce on April 12. From the beginning of March to April 21, spot gold in London rose by more than 16.95%.

However, in recent days, gold seems to be a bit "unable to rise". Why?

First of all, gold is a safe-haven asset. The greater the risks and uncertainties in the external environment, the stronger the demand for gold. Zhao Qingming, vice president of the Institute of Information Technology, said that the previous Israeli attack on the Iranian embassy in Syria and the escalation of geopolitical risks in the Middle East led to a rise in gold prices. However, tensions in the Middle East have been temporarily eased recently, and the prices of precious metals such as gold have also adjusted.

In addition, after the rebound in U.S. inflation in recent days, the Fed's interest rate cut expectations fell to the "freezing point" - the rate cut may be reduced again, the time may be postponed again, and the "hawkish" statements of Fed officials have caused gold prices to retreat for a while.

Gold prices fluctuated, and physical gold consumption was also affected. At present, the gold price of many brands such as Chow Tai Fook, Lao Fengxiang and Liuliufu is about 715 yuan per gram, and the recovery price of Lao Fengxiang, Chow Tai Fook and Chow Sang Sang have increased by more than 0.7%. According to media reports, the number of people selling gold bars has increased significantly in the past few days, and customers who buy gold bars and jewelry are also actively inquiring about prices in preparation for the "May Day" holiday.

Is now a good time to buy gold?

Xu Ying, chief macro analyst of the Orient Securities Derivatives Research Institute, said that short-term gold prices have entered a stage of shock consolidation, but it does not mean that gold's upward cycle is over.

Xu Ying believes that in the short term, the U.S. economic data is acceptable, the Federal Reserve's monetary policy is hawkish, and the geopolitical situation has not escalated, gold lacks upward momentum, but in the medium and long term, high interest rates + high inflation pose a downside risk to the U.S. economy, the volatility of the financial market is also increasing, the Fed's balance sheet shrinkage is facing adjustment, and monetary policy will eventually enter an easing cycle. In addition, in the context of intensifying de-globalization, the importance of gold allocation is increasing, which forms the basis for gold's long-term rise.

Li Xunlei, chief economist of Zhongtai Securities, also said that from a historical point of view, although the price trend of gold is "short bull and long bear", the bull market increase is much greater than the bear market decline. For example, the bull market from 1972 to 1979 rose by 1781.5%, fell by 69.5% in the next 20 years, and rose by 644.3% in the following 10 years. The most recent round of decline was from July 2011 to December 2015, when it fell by 42%. Since 2016, gold has seen a new round of gains.

He believes that the general over-issuance and depreciation of global currencies have deepened people's concerns about the proliferation of paper money and increased people's demand for asset allocation such as gold, which naturally has monetary attributes. Therefore, the long-term logic of gold's rally holds true.

However, according to Zhao Qingming's prediction, on the whole, after a period of rapid rise, gold prices have been relatively overvalued. If the situation in the Middle East does not deteriorate significantly, gold prices may continue to retreat.

Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, suggested that in the long run, there are still many uncertainties affecting the trend of gold, and there are high requirements for investors to be professional. From the perspective of prudent investment, we should be more inclined to diversify our portfolio, invest prudently, and pay attention to short-term market volatility risks.

Source: The country is a through train

Editor: Zhuge Ruixin

Editor-in-charge: Wei Xi

View original image 622K

• 

•