Financial Headlines: Why Is It A Good Time To Hoard Gold?

Market panic is increasing.

Prices are also rising.

On Thursday, the price of gold futures delivered in August hit a three week high, rising to 1272 .70 per ounce, slightly below the key resistance level of $1275.

The price of gold has risen by about 20% since the beginning of this year. Some well-known investors, such as George Soros (GEorgeSoros) and Stanley Druckenmiller (StanleyDruckenmiller), are no longer a secret about future market slump, and they think that hoarding gold is a safe investment option.

Jim Steel, Chief Commodities analyst at Jim Steel, said: "geopolitical elements are not a small factor. I think the global economy is facing too much uncertainty, and even some geopolitical tensions can continue to stimulate the gold market's purchases."

Investors believe that they need to add gold in their portfolios to circumvent certain losses and hedge the central bank's loose policies, while some other security factors are also driving gold appreciation.

Some analysts say gold can easily reach more than $1300 an ounce.

In fact,

(DoubleLine CApital) CEO Jeff Gonderak (Jeff Gundlach) also optimistic about gold, and that gold can rise to $1400.

According to reports, Soros has already bought gold and gold mining shares.

Last month, Druckenmiller told investors to sell shares and buy gold in order to prevent the collapse of China's economy and the Fed's loose monetary policy.

Analysts say there are many reasons for investors to accumulate large amounts of gold. To some extent, the US presidential election later this year is also one of the factors.

"I think investors must prepare for Britain's return to Europe," said Dennis Gartman, a senior commodities analyst at Gartman investment communications.

The Spanish election will begin in a week and a half, and the Spanish situation is very chaotic at present. It seems that the left wing camp will win.

In France, nationalism is widespread, accompanied by strikes and unstable events one after another.

Other concerns include tensions between Southeast Asian countries and China in the South China Sea, and the destruction of oil facilities by Nigeria militants.

Gold is rising and the US dollar is falling. This phenomenon is also driving up the price of other commodities.

This year, the Fed's rate hike is expected to fall from 4 to 2, resulting in a declining US dollar exchange rate.

Last week, the US employment report released in May showed that the job market was sluggish and the market was more skeptical about whether the Fed would raise interest rates this year.

After the report was released, gold prices hit a new high this year.

Steele said: "I think a key element is more important than any geopolitical problem and even higher than the Fed's interest rate increase. That is, the real interest rates of some economies are in negative value.

This is a great benefit to gold.

When you look back at the beginning of the gold rally, you will find that when the gold is rising, the yield of the bonds is negative.

Look at all the economies with negative real interest rates. They add up to only a little more than 27% of the world's GDP, and negative interest rates are undoubtedly a strong stimulant for gold.

Negative interest rates can eliminate the opportunity cost of holding gold. "

Steele said gold has been stable, rather than the price surge caused by the gold rush.

Steele said: "basically, every rally is a good time to invest", and there are actual demand factors to curb the rise in gold. Buyers in the two biggest markets of China and India are not very active now.

Steele said: "this is like a table with a leg missing.

Gold needs large-scale investment intervention.

I think gold prices will rise further in the long run. As long as there is enough demand for physical gold, the current demand for gold is not enough, which is an obstacle to further gold. "

Britain will vote on whether to leave the EU in June 23rd, which is a major stimulus for investors to hoard gold.

Gartman said that the trend of gold prices is closely related to the final voting results, while the euro will weaken the security status of the Swiss franc.

Jim Wickhoff, a senior analyst at Kitco, said: "in fact, whether or not the final vote of Britain's return to Europe is passed is not a good sign for the European Union" (Jim WycKOff).

Vickoff predicted that Britain would not succeed in returning to Europe, but if the vote was finally passed, the EU would probably start to collapse.

Vic AF said: "if the euro will disappear, people will use the euro to buy large quantities of gold in order to avoid risks."

Vic AF said: "if Britain passes through Europe, what will be the next step? If Britain is out of the EU, will some neighboring countries ask for it to launch? Imagine how this will lead to changes in the euro.

People will buy large amounts of gold in their euros, in order to prevent the risk of the euro from ceasing to exist for some time.

Of course, this is not the main reason for buying gold, but this is also one of the considerations.

Vic AF said that if gold breaks through the price of $1275 an ounce, the next target price is $1308 an ounce, which will be the highest price of gold in the whole year.

This price level will bring a new round of buying and push gold to a higher price.

Steele said that the ETF will be the biggest buyer of gold this year.

So far this year, the gold purchase volume of exchange traded funds has risen by 12 million ounces, and currently holds 52 million ounces of gold.

SPDR GOLD Trust ETF GLD has the largest holdings.