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Since the beginning of this year, gold prices have continued to "heat" and repeatedly broken record highs, but since late April, gold prices have "braked" and ushered in two more obvious declines. On April 22, the gold market "changed" overnight, and the gold price recorded the largest single-day decline in nearly two years, and fell below $2,300 per ounce on the 23rd. On April 30, the international gold price fell significantly, falling by more than 2%.
On May 7, the international gold price closed slightly lower. At the close, the June gold futures price on the New York Mercantile Exchange closed at $2,324.2 an ounce, down 0.30%.
In terms of domestic gold prices, affected by multiple factors such as the decline in international gold prices and the promotion of the "May Day" holiday, the terminal gold price has fallen significantly. The price of branded gold after the discount is back to the "5 era". During the "May Day" holiday, the sales staff of Zhou Taisheng's store said that the discount per gram during the holiday was 100 yuan, and the discount was 599 yuan/gram, and the cost of work was calculated separately. During the holiday, in addition to store activities, shopping malls also have preferential activities for gold purchases, and there are more gold buyers during the holidays.
At the time of the fall in gold prices, some investors boldly "started", and some investors in Hangzhou bought 2 kilograms of gold bars at a relatively low level in this round of gold price adjustment, spending nearly 1.08 million yuan.
As investors buy gold bars, China's central bank is also "binge" into gold. On May 7, the State Administration of Foreign Exchange released the latest data showing that as of the end of April, China's gold reserves reached 72.8 million ounces, an increase of 60,000 ounces from the end of March, increasing gold reserves for the 18th consecutive month, and gold's share of China's official foreign exchange reserves has reached an all-time high.
Looking back at the development of the gold industry in mainland China:
-- Gold production resumes growth
Judging from the production data, from 2017 to 2021, the mainland gold supply entered a landslide channel, and returned to the upward channel in 2022. According to statistics from the China Gold Association, the output of raw gold in mainland China in 2022 was 372.048 tons, an increase of 43.065 tons compared with the same period in 2021, a year-on-year increase of 13.09%. Among them, 295.423 tons of gold were mined and 76.625 tons of non-ferrous by-product gold were produced.
In the first three quarters of 2023, the domestic raw gold output was 271.248 tons, an increase of 1.261 tons compared with the same period in 2022, a year-on-year increase of 0.47%, of which 214.866 tons of gold were completed from gold minerals and 56.382 tons of non-ferrous by-product gold.
-- Fluctuations in gold consumption demand
From the perspective of mainland gold consumption demand, the consumption of gold in mainland China fluctuated from 2017 to 2022. In 2018, the country's gold consumption peaked at 1,151.43 tons; Affected by the epidemic in 2020, the annual gold consumption demand fell to 821 tons, the lowest value in recent years. In 2021, it surged by 36.5% year-on-year to 1,121 tons; In 2022, mainland gold consumption fell again to 1,001.74 tonnes; In the first three quarters of 2023, a total of 835.07 tonnes of gold was consumed.
-- The price trend of the gold industry
From the perspective of gold price trends, from 2017 to the first half of 2020, the global gold price showed a fluctuating growth trend, reaching a high of US$2,000 per ounce in July 2020. From 2021 to 2023, the global gold price fluctuated at a high level, reaching $2,045.4 per ounce in December 2023.
Looking ahead, Zheng Hong, a senior analyst of macro and precious metals at Zheshang Futures Research Center, believes that in the short term, risk aversion has eased, indicating that precious metal prices still have a demand for a pullback, and in the long run, gold still has room to rise in global uncertainty and the expectation of US dollar interest rate cuts.
A senior investment adviser of the private banking department of a state-owned bank in Zhejiang pointed out that in the absence of a clear expectation of interest rate cuts by the Federal Reserve, geopolitical risks will dominate the trend of gold, and gold maintains a volatile judgment. He further said that "the next major upward wave of gold requires a significant decline in U.S. bond interest rates or a further escalation of geopolitical risks, and it is recommended that investors participate in regular investment."
Note: This article is for content purposes only and does not constitute any investment advice.
Prospective Economist APP Information Group
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