Gold Price Roller Coaster

Gold price experienced a sharp rise and fall, the trend slowed down.

On August 13, spot gold fluctuated around $1930 per ounce in the European market, while Comex gold futures also returned to around 1940 US dollars / ounce.

The market is finally relieved.

However, investors have different views on the future, and the long short game is still fierce.

According to a survey conducted by the 21st century economic report, most of the institutions are still optimistic about the trend of gold in the medium and long term, but believe that the short-term fluctuation of gold price will intensify. Some people say that the gold price correction is a buying opportunity; others suggest that you should wait until the band is more clear before adding positions.

Sharp rise and fall

Wang Xiang, manager of Boshi gold ETF fund, pointed out: "the adjustment expectation of the gold market has been fermenting for a period of time. The rapid influx of speculative funds in the short term has boosted the gold price to continuously refresh the historical high point, but it also brings the hidden danger of the decline of market stability. COMEX's recent recovery in gold may have increased the potential for investors to take profits based on the expectation of a strong economic recovery. "

This round of international gold price rise started on July 17, when the gold price was 1809 US dollars / ounce. On July 27, it quickly broke through the 2011 record high, reaching 1911 US dollars / ounce, and then continued to rise. As of August 7, the gold price reached the highest of 2075 US dollars / ounce, with a total increase of 14.7%.

The sudden rise in the price of gold in July is a key turning point.

Affected by the sharp fall of international gold and silver prices, on August 12, the main futures market of Shanghai gold and Shanghai silver futures closed the limit of decline. On the same day, the Shanghai Gold Exchange announced that there were many uncertain factors affecting the market operation recently, and the gold and silver prices continued to fluctuate sharply in both directions. All member units are requested to continue to make detailed risk emergency plans, prompt investors to do a good job in risk prevention, reasonable control of positions and rational investment. The exchange will take risk control measures as appropriate to maintain the smooth operation of the market and protect the interests of investors.

Zhang Ting, a senior Macro Analyst at GESHANG wealth, analyzes that the recent sharp rise and fall of gold are mainly due to three factors: first, the recent continuous rise in the yield of us 10-year nominal treasury bonds, which has raised the opportunity cost of holding gold and curbed the rise of gold price in the short term; second, the recent gold price has reached a record high, some funds have withdrawn in large scale, and the active short-term trading funds have led to market stability Thirdly, the news of Russia's vaccine success has reduced the demand for gold as a safe haven.

Gold prices began to plummet in the afternoon of August. On August 13, spot gold fluctuated around us $1930 per ounce, while Comex gold futures returned to around us $1940 / oz.

Gold's position fell by 371.63t in the third consecutive day, or the largest decline in gold trading since the current gold price slump of 1257.63 tons. Some gold ETFs also showed signs of capital outflow.

But domestic investors are doing the opposite.

Since the fall of gold price on August 7, the share of domestic gold ETF has increased. As of August 13, the fund shares of nine domestic gold ETFs have increased by 200 million, an increase of 3.55%.

In this regard, Wang Xiang commented that the precious metal market has seen a certain withdrawal in the short term, more or only a technical turnaround, to ease the recent over radical trading sentiment, but not a real reversal. It is easy for the market to move from one extreme to another. On the basis of an abnormal large discount on gold prices, RMB denominated gold continued to expand the discount to 25 yuan / g (1.8%) in the morning of the 12th. This is the extreme performance of panic. However, it is obviously a rare opportunity for configuration traders who focus on the medium and long term to enter the market again.

"Overall, the current market for gold later trend divergence increased." Zhang Ting said.

In fact, the industry believes that in the short term, there is great uncertainty about the trend of gold around the progress of vaccines, fiscal and monetary stimulus, and the fluctuation of US dollar and US debt.

Got some?

Most of the institutions interviewed by the reporter are optimistic about the trend of gold in the medium and long term, but also pointed out that in the short term, we should be alert to the risk of gold price callback.

Yang Delong, executive general manager of Qianhai open source fund, pointed out that in the long run, gold prices will continue to rise in the future due to the difficulty of the Fed's easy monetary policy to exit in a short time (monetary attribute), extreme pressure before the US election (hedging attribute) and inflation expectation (commodity attribute) brought by the rapid rise of industrial product prices.

"In the context of a weak US dollar cycle and rising inflation, we are still optimistic about the future rise of gold in the long run, but in the short term, gold price volatility will increase correspondingly due to the interweaving of multiple news." Zhang Ting said.

Zhang Ting suggests that investors can participate through gold ETFs, and Huaan gold ETF is the most active one at present, but she does not recommend investing in gold stocks.

Is the recent collapse of gold price a short-term admission opportunity?

Zhang Juntao of Societe Generale Securities believes that gold rose sharply in the early stage and overdraw excessively in the future, and gold has started monthly level shock adjustment. However, the US Federal Reserve still maintains the purchase of bonds, adding that inflation is still expected to rise within one to two years, and the logic of gold bull market is still in place. But as things stand, gold should take at least a few months to clean up.

GF Securities predicts that gold may be in a flat period before the U.S. election, and it is very likely that gold will have a wave of upward market in the first half of next year, and gold may face adjustment risk after 2022.

Xue Na, precious metals analyst at South China futures, said that from a trend tracking perspective, it might be more appropriate to wait for a period of time to buy when a breakthrough occurs. It suggests that investors should reduce trading frequency and trading volume, and then add positions when the band is more clear.

Yuan Huaming, general manager of Huahui Chuangfu investment, believes that "the current gold price is still at a historical high level, and the trend is not clear. Ordinary investors can find opportunities to allocate a small number of positions from the perspective of risk aversion and decentralized investment."

However, according to the research and report analysis of Great Wall Securities, the weakening of the US dollar index is still a major trend in the future, and the real interest rate will probably maintain a downward trend. The short-term adjustment of precious metals will not change the long bull trend, and the correction may bring better opportunities for covering positions. From the perspective of plate configuration, under the background of strong economic and political uncertainty, precious metal plate also has a strong allocation value.

As for the future market, Mr. Xiao Mo, general manager of xuanduo asset management, pointed out that "futures are mainly zero sum games, and the profits are mainly due to the continuous rise of the opponent's plate in gold, especially the breakthrough of the historical high of US $2000. The enthusiasm for long-term trading has begun to weaken, and many bulls are waiting for adjustment and intervention. Turn head down market. And stop falling near 1900 indicates that there are still opportunities in the future market. For gold stocks, you can choose the stocks with little increase to ambush, or take part in the stocks with no rise in gold. "

"After full adjustment, the gold price still has the possibility of hitting a new high again," said Xia Fengfeng, the future star fund manager of private placement network. For ordinary investors, it is necessary to fully understand that the fluctuation of gold is not large compared with that of stocks, which is about double the fluctuation of paper currency exchange rate. The fluctuation of gold price has more impact on leveraged investors. "

"I suggest that ordinary investors do not need leverage to participate in real gold investment such as gold ETFs from the perspective of long-term allocation." Summer scenery said.

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