The price of gold per gram fell by 30 yuan, and the gold market experienced a "roller coaster"

Cover News

2024-05-07 20:29Posted on the official account of Sichuan Cover News

Cover News Reporter Zhu Ning

During the May Day holiday, the gold market experienced a wave of "roller coaster" market, since May, the international gold price as a whole has shown signs of retracement, since the high of 2448.8 US dollars / ounce on April 12 is a retracement of more than 6%. Affected by multiple factors such as the decline in international gold prices and holiday promotions, the domestic terminal gold prices have dropped significantly, and the gold prices of most brands of jewelry have fallen to about 30 yuan compared with the peak price in April.

Multifactorial influence

Gold prices fell

Before April this year, the international gold price continued to rise and hit record highs many times. According to the data, the spot price of gold in London touched a high of $2,430.7 per ounce in mid-April.

New York Gold Owners Trend

After reaching a high, gold prices fell nearly 3% on April 22, the biggest one-day drop in two years. On April 30, the international gold price fell significantly, with the New York Mercantile Exchange gold futures for June falling 2.32% to $2,302.90 an ounce, and on May 3, New York gold futures fell to a nearly one-month low. On May 7, as of press time, New York gold futures fell 0.39% to 2322.29 yuan / ounce.

Under the influence of futures prices and spot prices, the price of gold jewelry has also declined, and at present, the price of brand gold jewelry is about 700 yuan. For example, the price of Saturday Fu gold is 707 yuan/gram, the price of Chow Tai Fook gold is 713 yuan/gram, and the price of Chinese gold is 679 yuan/gram, if you count various discounts, it basically breaks through the integer mark of 700 yuan/gram, compared with nearly 740 yuan/gram in mid-April.

Jewelry gold gold price

From the reasons for the change in gold prices, a few days ago, the Federal Reserve maintained the benchmark interest rate unchanged, Federal Reserve Chairman Powell said that the future will slow down the pace of shrinking the balance sheet, which is regarded by investors as a foreshadowing of future interest rate cuts, coupled with the number of new non-farm payrolls in the United States in April was significantly lower than expected, the market began to expect the Federal Reserve to cut interest rates as early as September, promoting the risk appetite of the stock market.

Industry insiders believe that despite the recent significant decline in gold prices, there is still potential for gold prices to rise in the long run. Some analysts pointed out that factors such as global interest rate cut expectations, geopolitical risks, and central bank gold purchases will boost the price of gold. Therefore, even though gold prices may face some volatility in the short term, the trend of the gold bull market has not changed in the long term.

Jewelry gold gold price

Gold may have a consolidation trend in the short term

The market outlook is still supported by rising factors

"After this year's record-breaking rally, the gold market is currently going through a period of correction. At present, the overall trend of gold is still weak, and the market may continue to consolidate for a while. For the later trend of the gold market, a researcher told reporters that from the macro direction, because the Federal Reserve will eventually cut interest rates, the price of gold will still rise in the general direction, but the rally may not appear in the previous state of sudden progress, but will be extremely slow, by slowly climbing to reflect the current economic cycle position.

Another industry source said that gold prices are expected to continue to pull back in the short term, but they also said that due to the support of the Federal Reserve's interest rate cuts and central bank gold purchases, gold prices will show a trend of first falling and then rising in the future.

The reporter noted that according to the World Gold Council, despite the price increase, the central bank's "gold rush" continued into the first quarter, indicating that central bank demand may still be the backbone of aggregate demand in the future. Central banks bought around 290t of gold in Q1, higher than our expectation of around 220t per quarter in 2024. These bids hit a record first-quarter high and set the stage for central banks to potentially buy more than 1,000t of gold for the third year in a row.

For the market outlook, Guosheng Securities research report shows that the demand for gold purchased by central banks fluctuates greatly. The central bank's purchase of gold is mainly driven by risk aversion and the need for value preservation. Generally speaking, gold, as a general equivalent used worldwide, can be directly used for international trade payment and debt repayment when foreign exchange reserves are insufficient or the use of gold is restricted. As a reserve asset with physical value, gold can enhance the credibility of sovereign currencies and facilitate the internationalization of sovereign currencies. The value of gold is stable, and the demand for gold allocation is expected to continue to increase and gold prices are expected to remain high in the context of global currency over-issuance and flooded liquidity.

UBS also said that while gold does have the potential for some weakness in the near term, especially if strong U.S. economic data further delays the Fed's rate cut cycle, it insists on believing that gold could reach $2,500/oz by the end of 2024/early 2025.

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