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Source: Shanghai Securities News
Yan Xiaofei
The gold market is hot again.
On May 20th, spot gold in London rose to an all-time high of 2450 US dollars per ounce. The futures market and the stock market were no less favourable. COMEX gold set an all-time high in intraday trading, and the main contract of Shanghai gold closed at 578.Asteroidsgamefree84 yuan per gram, only one step away from the all-time high of 589.62 yuan per gram set on April 15AsteroidsgamefreeThe A-share precious metal sector rose 6%, and a number of gold stocks rose by the daily limit.
In addition, the official website of Chow Tai Fook, Zhou Shengsheng and other gold jewelry brands shows that the gold price of its full gold jewelry has exceeded 742 yuan / g today.
Industry insiders believe that the Fed is expected to cut interest rates, geopolitical tensions have intensified to push up the gold market to achieve another good performance, gold prices are still in the upward stage in the medium to long term, and interest rate cuts will become another key factor in catalysing the rise in gold prices.
Enthusiasm in the gold market is running high.
The "highlight moment" of the gold market is back. On May 20, spot gold in London approached 2450 US dollars per ounce in intraday trading, breaking the all-time high set on April 12 and setting a new high. As of press time, spot gold prices in London remained volatile around $2440 an ounce.
The "hot" of the spot side continues to the futures side.
COMEX gold futures also hit an all-time high, hitting as high as $2454.2 an ounce. The domestic futures market rose, and the Shanghai gold contract became stronger after the opening of the 2408 session. By the close, it rose 2.81% in a single day to close at 578.84 yuan / g, only one step away from the all-time high of 589.62 yuan per gram set on April 15.
The performance of A-share related stocks is not inferior.
On May 20, the precious metal plate led the rise in the A-share market, with a number of stocks rising by the daily limit. By the close, the precious metal plate had risen more than 6% within the day, Xiaocheng Science and Technology, Hunan Baiyin and Sichuan Gold had risen by the daily limit, Hunan Gold and Yintai Gold rose by more than 8%, and western gold rose by more than 6%. Chifeng Gold, Hengbang shares, China Gold and other gold rose more than 5%, and Shandong gold rose nearly 5%.
Guojin Securities Research report said that the slowdown in the growth of self-produced gold costs of gold stocks in 2023 indicates that the performance of gold stocks may show strong growth in 2024, with the expected rise in gold prices and the stability of cost control. At present, the market expectation of gold price rise has not been fully reflected in the market value of gold stocks, which means that the sector has greater "make-up" potential, which is expected to usher in a significant rally.
Multi-factor resonance increases the price of gold
The Fed is expected to cut interest rates and geopolitical tensions are on the rise. Multiple factors work together to ignite the gold market.
Soochow Securities analysis said that the U. S. inflation data fell month-on-month, providing data support for the Fed to cut interest rates. Federal Reserve Chairman Colin Powell claimed that raising interest rates is not part of the Fed's option for the time being, which has greatly reduced the market's expectations of raising interest rates as a result of CPI's continuous exceeding expectations since the beginning of the year. In addition, the ECB board of governors Nott believes that June may be a good time to cut interest rates for the first time. Gold prices at home and abroad are moving well under the influence of rising expectations of overseas interest rate cuts and renewed geopolitical risks in the Middle East.
Gold prices hit an all-time high in Asian trading on Monday on renewed hopes of a Fed rate cut and rising geopolitical tensions in the Middle East, said Lallalit Srijandorn, an analyst at FXStreet. At the same time, rising tensions between Russia and Ukraine, both of which launched attacks on each other over the weekend, also boosted demand for safe havens.
Gold prices will remain strong in the medium to long term.
Looking forward to the future, will the "soaring" gold price hit the "sudden brake" or continue to drive in the "fast lane"?
"in the process of global'de-dollarization 'and diversification of the international reserve system, the continued emergence of gold purchases by central banks in emerging countries has left gold prices in a' falling 'situation, and gold prices are still in the upward phase in the medium to long term." Gao Ruidong, chief economist of Everbright Securities (activist), believes that in view of the approaching US election, the cooling of non-farm data and the controllable upside risk of inflation, September will be a key window for the Fed to cut interest rates. Interest rate cuts will be another key factor in catalysing the rise in gold prices.
Gao Ruidong added that looking back at the gold price performance before and after the Fed's 12 interest rate cuts since 1970, gold prices generally rose 1-3 months before the interest rate cuts, with an average increase of 8%. Gold prices rise and fall half probability, depending on subsequent changes in the fundamentals of the US economy. "if, after the interest rate cut, the US economic growth picks up and the risk of secondary inflation can be controlled, it will be difficult for the interest rate cut to catalyze a further rise in gold prices, and gold prices may have the risk of a correction."
Caitong Securities said that under the influence of macro uncertainties such as geographical conflicts superimposed by the central bank's demand for gold, gold prices are expected to remain strong in the medium to long term. On the one hand, the stabilization of gold prices is expected to lead to the release of some consumption of rigid demand for gold jewelry, and terminal consumption of key holiday nodes such as Qixi Festival, Mid-Autumn Festival and National Day is expected to resume. On the other hand, the superimposed gold price is expected to support in the medium and long term, and gold consumption is expected to be partially repaired in the second half of the year.