Gold Prices Plummet Again. How Should Ordinary Investors Respond To The Current Market?

After a continuous plunge in April, international gold prices did not show signs of stabilisation, 6 in mid December. Gold price Again, a sharp fall, which made the "Chinese aunt" who was crazy to copy the bottom, suffered heavy losses. Why has gold, which has always been regarded as a prudent investment product, has such a sharp price fluctuation this year? Has the 12 year golden bull market really ended? How should ordinary investors respond to the current market?

　 "Chinese mother"

The bottom of the quilt is "falling down".

"I knew only that the stock market had plummeted. I never thought that buying gold would also encounter a sharp fall. Is gold not very robust? Why is it so down?" Sun Dun, a resident of Beijing, has been disturbed recently.

Sun Ma, who retired last year, wants to make some investments with her savings so that she and her wife can be more secure in their old age. For safety reasons, she has always been worried about the collapse of stocks and funds. She has always believed that investing in gold is still relatively healthy.

In the middle of April this year, the international gold price experienced a rare decline in the history, which dropped by 15% in two days. It was during the gold crash that sun opened a Renminbi paper gold account at ICBC and changed her about 200000 yuan deposit into 800 grams of paper gold at 280 yuan / gram. Then, along with the rebound in gold prices, sun Ma's paper gold once rose to around 290 yuan. In a few days, the book profit was nearly 8000 yuan, which made sun aunt very happy that he could hold gold all the way to maintain value and increase value.

Unfortunately, it didn't last long. After entering May, gold continued to fall, and sun's earnings were swallowed up in a few days. But she is relatively calm. She thinks gold is up and down. It is normal for her to buy gold when it is plunging. There will be no big problem.

Who knows, in the first half of 6 months after the shock of the crosses, in June 20th, the international gold price once again appeared a single day crash market, the largest drop of 76 U.S. dollars, or more than 6%. After the collapse of the day, the gold price in sun aunt's account has reached 250 yuan, and in less than two months, it has changed from profit to loss of more than 20 thousand yuan. Looking at her account, sun aunt could not understand it. "Many people around me are buying gold. On TV, many people are buying gold. How can they fall into such a situation?"

Like sun aunt, many people believe that gold is a "hard currency" that can be maintained and added value, while the risk of investing in gold is not enough. With the sharp fall in international gold prices, the domestic gold sales market has lowered the price of gold ornaments and investment bars. Reporters learned in several major gold markets in Beijing that after the slump in late June, the price range of gold in the major gold stores was generally 40 to 50 yuan per gram, of which the price of thousands of gold bases in the shopping malls was reduced to 330 yuan per gram. However, unlike the April gold price crash, the gold price reduction is "making money without making money".

In front of the gold sales counter of Guohua shopping center in Beijing, the salesperson told reporters that the fall in gold prices in recent days really attracted many people to come to inquire. But the real sale of gold was not as many as in April, and most of them bought jewellery. There were few people seeking investment in gold bars. This is a common case in several gold stores visited by reporters.

　　 Gold shop owner

Market is hard to recover. gold Dare not play lightly

In fact, the recent decline in international gold prices has been far more hurt than ordinary investors such as "China's aunt". Some operators who have worked hard in the gold industry for many years can hardly escape their bad luck.

Zhang opened a gold jewelry store in Jin Yuan jewelry and Antique City, Haidian District, Beijing. Besides normal gold sales, he also operated gold repurchase business.

"General stores or banks require special certificates to buy back gold bars. I can check them on the spot here. As long as the purity of gold is up to standard, both jewelry and gold bars can be recovered." Zhang's owner said that the gold he had recovered was sold to the jewelry processing enterprises in Guangdong. No matter what the customers sent were jewelry or gold bars, he recovered according to the gold price of the Shanghai Gold Exchange on the same day, and generally had a profit of 10 to 20 yuan per gram. And when the price of gold rises, he will repurchase the gold for one or two months and make profits again. In recent years, more and more customers have been realized in the store because of the convenience of realisation. {page_break}

"I have worked in this business for more than 10 years, and I have never met such a market this year. I really can't understand it." Zhang boss told reporters that before each big drop in gold prices, he would add part of the source of goods or increase the price of gold recovery, less than a month, the price will rise. After the gold price plummeted in April this year, many jewelry processing enterprises sought gold raw materials for him, and the people who came to buy gold bars in gold shop were also in an endless stream. When he saw so many people rushing to buy, Zhang boss did not rush to sell the gold he had collected, instead, he bought some yellow gold in the hands of some customers.

Then the price of gold did not rise as usual, but continued to decline. After the collapse of the gold price in June 20th, Zhang boss found that the situation was wrong. He immediately contacted several gold processing enterprises, hoping to sell the gold that he received at a high price. Everyone knows very carefully that only a few old customers have reluctantly asked for a price, and the price is still very low, and the gold jewelry they receive at a high price is at risk of not being sold at a loss.

Experienced the roller coaster market, Zhang boss no longer dare to sell gold easily, "all say gold long-term bullish, but like our shop, capital turnover is very difficult, if gold turns into a bear market, no one dares to store gold in the long term in hand, only to sell at a loss." Zhang said that if the gold price really started to bear the bear, he was ready to cash in the gold and turn it into jade, jewelry and other businesses.

　　 Experts look at "gold"

In the next 5 years, the unilateral rise of gold price is hard to reproduce.

The famous financial expert, vice president of Huaxia Bank, explains that the investment value of gold lies mainly in hedging and keeping value. That is to avoid large devaluation of paper currency in the great social upheaval. Gold prices rose sharply after the international financial crisis in 2008, and gold prices rose again in the global regional turmoil in 2011. Since 2012, global financial markets have tended to be stable, gold hedging and hedge value have been greatly reduced, and gold prices are falling.

"I personally do not approve of my uncle's gold as a daily investment product. Because gold Investment It is a very professional thing. It needs to have a better understanding of the global economic and financial situation, the regional situation, and the trend of the US dollar exchange rate. Golden old said that the past 5 years of gold rose, people catch up, seize the opportunity, is a good thing, the next 5 years is unlikely to reproduce the gold price rise unilaterally.

Zhao Yurui, a macroeconomic analyst at Huaxia Bank, believes that the "Chinese mother" has been caught in the bottom and many ordinary investors have seen the risk of the gold market. Not only gold trading, including investing in stocks, funds, and financial products, we must bear in mind that "there is no risk free interest".

"Even in the case of the current quilt," China's aunt "in April is gradually mature performance. After all, it is different from the past chase ups and down, but fell down to buy, but the overall trend and the judgment of buying time is not accurate enough. Zhao Yurui said that in the future, ordinary investors can still participate in gold investment, but they must have a deeper understanding and accurate positioning of the commodity property of gold. Change the idea that gold will not rise or fall.

Jiang Shu, a senior precious metals analyst at Xingye Bank, believes that the short-term volatility of gold prices is aggravated by the large number of investment funds entering the gold market. In terms of the current demand for physical gold per year, physical gold demand for gold bullion and investment purposes has accounted for 30% to 40% of the entire gold demand since 2009, which has strengthened the financial attributes of gold and intensified the short-term volatility of gold prices.

"For ordinary investors, we should gradually get rid of the unilateral thinking of the golden bull market over the past 12 years. In the future, buying and holding a bargain for a certain period of time may not yield an ideal return." Jiang Shu believes that in the current market, short selling gold may also be an option from the trend. Investors with strong risk tolerance can take part in domestic regular gold dual trading varieties.