RMB Revaluation, Gold Investor Frustrated

Shanghai, July, 18, according to the latest data from China foreign exchange trading center, the RMB against the US dollar in July 18th exchange rate The median price was 6.1720, down 68 basis points from the previous trading day.

The people's Bank of China authorized the China foreign exchange trading center to announce that the RMB exchange rate in the interbank foreign exchange market in July 18, 2013 was RMB 1 yuan to RMB 6.1720 yuan, 1 euro to RMB 8.0974 yuan, 100 yen to RMB 6.1865 yuan, 1 Hong Kong dollar to RMB 0.79562 yuan, 1 pounds to RMB 9.3901 yuan, 1 Australian dollar to RMB 1 yuan, Canadian dollar to RMB RMB yuan, RMB yuan to the ringgit, RMB yuan to the Russian Russian rouble.

On the previous day, the central parity rate of RMB against the US dollar was 6.1652.

Bernanke, chairman of the Federal Reserve, said that as long as the US economy is expected to grow, the Federal Reserve will gradually withdraw from the quantitative easing monetary policy later this year. Overnight, the US dollar rose against the main currencies and the central parity of the RMB against the US dollar fell.

1, recent RMB appreciation It is expected that the gradual rise of its impact can be described as "taking the lead and moving the whole body". Under this background, what will be the impact of gold? For the vast majority of gold and gold stocks investors, if we do not pay attention to the appreciation of the renminbi, will the investment be less than ideal in 2013?

2, the appreciation of the renminbi will suppress the domestic gold price. If we take the US dollar gold price as the benchmark and assume that it remains unchanged for a period of time, because the RMB has been in a state of appreciation, the domestic spot gold based on the US dollar has always been in a relative depreciating value, which means that the purchasing power of the equivalent amount of RMB will be enhanced, and the gold price marked by it will fall.

3, the important factors that affect the operation of domestic gold price when the international gold price changes dynamically. In the case of RMB appreciation, whether domestic gold price is rising or falling? We believe that it depends mainly on two factors: first, the magnitude of RMB appreciation; and two, how big the international gold price is. We believe that the gold price increase in China will be far greater than the appreciation of RMB, which will effectively eliminate the negative impact of RMB appreciation on domestic gold prices, and will eventually drive domestic gold prices up.

5. Gold shares Investment should follow the strategy of "resource is king". Under the expectation of RMB appreciation, hot money will pour into foreign countries. The return of hot money will aggravate domestic liquidity. The result is that we must find the investment target and see the clue from the real estate market. This shows that a large number of resource reserves (i.e. unexploited resources) will become the focus of hot money chasing. So, for gold listed companies, who can be better depends entirely on their gold reserves. We believe that Zijin Mining (601899), as a large gold production enterprise in China, has obvious competitive advantages in terms of gold reserves, mineral production and production costs.