Source: Securities trader China
Gold is starting to cool down!
During the May Day holiday, Chinese journalists from securities companies visited several gold stores in Beijing and found that the price of gold had recently dropped from 730 yuan/g to about 719 yuan/g. However, due to the rapid rise in prices before, the flow of people in major gold stores during the holiday was significantly reduced. On the other hand, the gold trading price correction that began in late April is still ongoing. So far, the current price of gold in London has dropped from the highest $2430.7/ounce to the lowest $2280/ounce. However, according to the latest data, the global central banks are still increasing their holdings of gold assets, and China's official gold reserves have increased for 17 consecutive months.
The current situation of "one decrease and one increase" reflects the investors' investment psychology of "different lengths" of gold assets. According to the analysis of insiders, short-term gold may continue to suffer from the upward pressure of strong dollar and US bond yields, or face the risk of profit correction. However, in the medium and long term, the market's concern about the weakening of US dollar credit, as well as the continuous purchases of gold by central banks in recent years, together support the gold price "easy to rise but difficult to fall". Long term investors can hold some gold stocks, but it is not recommended to operate in frequent bands. It is suggested to invest gold as an alternative asset to win allocation returns.
The market is depressed, but the gold buying trend continues
From the perspective of gold price, the gold price has not gone out of the downward trend of callback during the May Day holiday. In terms of the longer range, this is a microcosm of the sharp adjustment of the gold price after it rose to 2430 dollars/ounce in the earlier period.
Data shows that the current price of gold in London reached a high of $2430.7 per ounce in the middle of April. After several days, it began to fluctuate and decline. On April 22, the price fell by nearly 3%, the largest one-day decline in two years. The lowest price fell below $2300 per ounce on April 23, and hit a low of $2280 per ounce on May 1. So far, it has remained volatile.
Wang Xiang, fund manager of Bosera Fund Index and Quantitative Investment Department, observed that in the week from April 22 to April 26, gold prices experienced the first significant weekly level correction since the rise in March. On the one hand, the military conflict between Iran and Israel has not further escalated, and the risk aversion brought by geopolitical risks has eased; On the other hand, after the lack of new upward momentum, the long profit taking has brought phased callback pressure, but the market selling process did not show panic stampede, and the lower support is still strong.
According to the Report on Global Gold Demand Trends in the first quarter of 2024 released by the World Gold Council on April 30, the global official gold reserves increased by 290 tons in the first quarter, the highest gold purchase scale of the central bank in the first quarter since the statistics. It should be noted that in this round of rapid gold buying by global central banks, the People's Bank of China has become the largest buyer in the gold market. The Report shows that China's official gold reserves will increase by 27 tons to 2262 tons in the first quarter of 2024. With the help of soaring gold prices, gold now accounts for 4.6% of the total foreign exchange reserves of the People's Bank of China, the highest level in history.
So far, China's official gold reserves have increased for 17 consecutive months. Since the announcement of additional gold reserves in November 2022, the official gold reserve of the People's Bank of China has increased by 314 tons in total. In dollar terms, the total value of gold reserves has increased by 44% over the same period. Over the same period, the central bank's total foreign exchange reserves denominated in US dollars increased by 5%. In addition, the demand for gold bars and coins in China in the first quarter was 110 tons, a year-on-year surge of 68%, the strongest performance in the first quarter since 2013. By the end of the first quarter, the total holdings of gold ETFs in the Chinese market had reached 67 tons, up 10% quarter on quarter; Due to the rise of RMB gold price, the total asset management scale (in RMB) has achieved a significant growth of 20%.
Short term volatility increases, but there is still upward momentum in the medium and long term
Based on the above situation, on the one hand, the market is cautious about the gold price callback, but on the other hand, it still gives optimistic confidence to the long-term value under the continuous improvement of gold reserves.
Shachuan, the fund manager of Tianhong Shanghai Gold ETF, analyzed that, Central banks are also continuing to buy gold, pushing the price of gold to rise above the previous threshold, which has led some wait-and-see investors or trend traders to catch up. However, unlike the past, the recent rise in gold prices and the rise in real interest rates are not in line with the historical law, showing non fundamental transactional factors. The central bank's gold buying behavior has a certain continuity, but the trend of chasing up and short stop loss behavior may not be sustainable. "In the future, the gold price may be significantly adjusted or fluctuated after the current level or short-term rise. Asset volatility will increase, and risk averse investors need to carefully consider affordability."
"In the short term, gold may continue to be under the upward pressure of strong US dollar and US bond yields, but it still has upward momentum in the medium and long term." Wang Xiang said that the short-term volatility of gold prices has increased, and the attitude towards the short-term marginal adjustment trend of gold has remained unchanged, but investors have further strengthened their attention during the adjustment period, which may be a better opportunity to re-enter the market throughout the year. "If the subsequent macro evolution does move towards re inflation, the high amount of bond interest payment and fiscal deficit in the United States, as well as the gradual consumption of the liquidity cushion in the United States, mean that the space for the Federal Reserve to further tighten is quite limited. The real interest rate highly negatively related to gold assets will really expand the downward space, and the gold trading odds will increase significantly. It is suggested that investors should actively pay attention to the emergence of intervention opportunities after the subsequent price fall. "
In the opinion of Shen Jing, the fund manager of Morgan Stanley Fund Equity Investment Department, The core influencing factor of gold is the medium and long-term real interest rate of the United States. After the Federal Reserve's interest rate hike peaked, the periodic decline in the interest rate of 10-year US Treasury bonds catalyzed the start of gold price. However, the escalation of geopolitical conflicts in April further pushed up the gold price, and the hedging nature of gold became a short-term influencing factor, which has greater uncertainty. "Therefore, after the situation eased slightly, the gold price fell back from a new high. In the medium and long term, the market's concern about the weakening of US dollar credit, as well as the central banks' continuous purchases of gold in recent years, together support the gold price's easy rise but difficult fall."
"It is not recommended to liquidate and sell"
Specifically, at the transaction level, investors are most concerned about the investment strategy of gold assets under increased volatility. In particular, how should investors who have positions floating in the previous period operate?
"It is impossible to accurately predict the specific rise and fall time of short-term gold price, and the recent volatility may be relatively large. It is suggested to hold a part of the price according to personal risk preference, such as 10% - 20%. Don't be too concentrated, pay attention to risk diversification, and don't invest with the mentality of gambling." Shachuan said that the price of physical gold and gold funds is basically the same, Gold shares, on the other hand, fluctuate greatly due to the influence of gold price and company performance. In the long run, the volatility of gold stocks is higher than that of physical gold. For long-term investors, it is reasonable to hold some gold stocks, but do not focus too much on risk.
"For short-term investment or investors who want to get pure gold income, gold funds may be a better choice because of convenient trading and low holding costs. In addition, investors can also consider paying attention to silver, which may rise more than gold, but the transaction is more troublesome," Shachuan said.
"In the short term, the market runs away from the loose expectations of transactions, and the rapid rise in the short term may to some extent bring about the risk of profit taking callback. In this context, it is not rational to blindly pursue the rise. If the subsequent gold callback occurs, it can still be configured on the low side." Cathay Pacific Fund said that gold, as a safe haven asset, from the perspective of asset allocation, shares Bonds have low correlation and are suitable for allocation in portfolios to smooth portfolio volatility. It is suggested that investors make a comprehensive judgment based on the global macroeconomic trend, geopolitical situation and global central bank purchases. For ordinary investors, it is recommended to consider combining their own risk preferences, or allocate some investable assets to gold assets from the perspective of long-term allocation.
For investors who have held positions in the previous period, Huaxia Fund said that it is not recommended to liquidate and sell. "Once sold, it may not be a good time to buy again in the future. If there is a correction in the short term, but if the future trend of gold continues to show volatility and upward, it is difficult to choose a second entry opportunity." Huaxia Fund said that in the medium and long term, the world is currently in a process of anti globalization, which will bring increased uncertainty, The cost of trade friction will also increase accordingly, and the inflation center will gradually move up in the future. As an anti inflation asset, gold may also outperform inflation in the medium and long term. "For a class of medium and long-term assets in the rising channel, it is not recommended to buy and sell frequently. It is recommended that everyone invest in gold as an alternative asset to win an allocation based income."
Safe, fast and guaranteed futures account opening on Sina cooperation platform
Massive information, accurate interpretation, all in Sina Finance APP
Editor in charge: Wu Sinan
