Gold price "twists and turns" experts remind to pay attention to risk management

Recently, the price of gold has fluctuated violently, presenting a situation of "ups and downs". During the National Day holiday, gold prices plunged. But only a few days later, the gold price went out of the "V-shaped" rebound and reached a high level again.

Specifically, taking COMEX gold futures closing price (continuous) as an example, international gold prices continued to fall rapidly from the end of September to the beginning of October. Wind data shows that on September 19, COMEX gold futures price was 1934.0 dollars/ounce, and then fell. On October 5, it reached its recent lowest point, 1816.5 dollars/ounce, a decline of 6%. However, since October 5, COMEX gold futures prices have rebounded in a "V" shape. As of October 13, 1928.5 US dollars/ounce, COMEX gold futures once again stood at the "1900" level, with an increase of about 6%.

What is the reason why gold prices have been "falling and rising" in such a short period of time? Liu Siyuan, chief analyst of Lingxiu Finance, said in an interview with the Securities Daily that the gold price is mainly related to the economic policies of major economies in the world, the spot demand for gold, and international geopolitics. Recently, the above three factors alternately affect the gold price, leading to a "V-shaped" reversal.

Before the National Day holiday, the US economic data exceeded market expectations, leading to a sharp increase in the pressure of the Federal Reserve to raise interest rates again. The rebound of the dollar index suppressed the correction of gold prices. After the National Day holiday, a new round of conflict between Palestine and Israel triggered market panic, and gold prices soared. During this period, the purchase of gold by central banks also pushed up the gold price from the spot demand.

"Affected by the conflict between Palestine and Israel, the value of gold as a safe haven has become prominent." Weng Zichi, a senior investment adviser of Jufeng Investment Advisors, also told reporters that the recent volatility of gold prices has intensified, and has also been repeatedly disturbed by the expected changes of the Federal Reserve's interest rate hike.

Yang Haiping, a researcher of the Securities and Futures Research Institute of the Central University of Finance and Economics and the general manager of the Research and Development Department of the Bank of Inner Mongolia, said to reporters that from the late September to the present, the soaring dollar index and the yield rate of US bonds were the key factors for the decline of gold prices during the period, and the risk aversion was the main driver of the recent rise in gold prices.

The recent trend of domestic gold price is similar to that of international gold price. Taking China's gold base price as an example, Wind data shows that on September 15, the base price hit the highest point of 479.1 yuan/g in the year. From the middle of September to September 26, the base price was still fluctuating at 473 yuan/g. However, from September 26 to October 3, the price of basic gold plunged sharply. The lowest point of the round was 440 yuan/g on October 3, which fell by more than 8% during the period. Since October 3, the price of basic gold has also rebounded in a "V" shape, and has continued to strengthen. As of October 15, 464.5 yuan/g was reported, up more than 5% during the period.

The price of brand gold jewelry is also on the "roller coaster". Taking the gold price of Chow Tai Fook as an example, according to the data of Financial Investment Network, the gold price of Chow Tai Fook jewelry reached 615 yuan/g at the end of September, dropped to 583 yuan/g at the lowest point during the National Day holiday, and dropped by more than 30 yuan/g, but rebounded after that. As of October 15, the gold price of Chow Tai Fook jewelry reached 600 yuan/g again, and reported 602 yuan/g.

In the case of such violent fluctuations in gold prices, the experts interviewed generally suggested that investors should pay attention to risk prevention.

Wang Peng, associate researcher of the Beijing Academy of Social Sciences, said that when investing in gold, investors should develop scientific investment strategies, maintain a good investment mentality, appropriately diversify their investment and focus on risk management. It is suggested to pay attention to market risk, liquidity risk, custody risk, exchange rate fluctuation risk, etc. It is necessary to pay attention to the international economic situation, exchange rate fluctuations, international geopolitical risks and other factors that affect the gold price.

"The price of the gold market fluctuates greatly, and investors need to have sufficient risk tolerance." Yu Xiaoming, senior investment adviser of Jufeng Investment Counselor, also told reporters that gold is a financial asset, and like other investment assets, there may be liquidity risk. When the market is turbulent, gold trading may be affected. In addition, do not invest too much money in a single asset.

Xie Xiaowen, a special researcher of the E-commerce Research Center, also said that the liquidity of the gold market is relatively low, especially in some special cases, it is recommended that investors choose gold investment tools with good market liquidity, such as gold exchange traded funds (ETFs), to reduce liquidity risk.

"Watch out for technical callbacks in the process of gold rebound." Liu Siyuan also reminded that as the international gold price approaches $2000/ounce, it will encounter selling pressure brought by the profit departure of medium and long-term holders. Investors can focus on the opportunity of callback buying.

key word: gold Price Gold price risk