7On July 1, the global gold price continued to fall, and the gold listed prices in major domestic gold stores also fell. And overall, the international price of gold has dropped from April to now, from the highest point of US$2,070 per ounce to around US$1,800 now. Yesterday, the international gold price was 1,811 US dollars per ounce. If converted into grams of gold, it would be 405 yuan per gram of gold.
In various domestic gold stores, the sales price of gold has also dropped, but it still reaches between 505 and 508 yuan per gram of gold. Of course, this price is still more than 10% cheaper than in March and April in the first half of the year. Many people are eager to try again, thinking whether this is a good time to buy gold?
Looking back at the beginning of the first quarter of 2022, due to the dual impact of the international epidemic and the unstable international situation, the safe-haven function of gold came into play, and the price of gold continued to be pushed up. After the international gold price reached its highest point of US$2,070, it continued to Fluctuating at high levels, gold remains near $2,000 per ounce. But now that the international epidemic situation is also declining, the world situation has begun to stabilize again, and the price of gold has naturally begun to decline.
Interested people have discovered that the listed prices in gold stores are higher than the prices in the international gold market, and they are much higher? Why is this? In fact, the international gold price is a bare gold price, which means that it is a transaction price in the financial trading market, not the actual transaction price of gold, and does not include any other costs.
Gold actually enters various gold stores. In this process, a lot of costs still need to be added, such as warehousing and transportation costs, storage costs, gold jewelry processing costs, gold capital occupation costs, and the merchant's reasonable profits. Generally speaking, the price increase of gold stores is generally around 25%. Of course, there is some room for negotiation, the main one being that merchants may give away some of their own profits based on competition needs and promotional needs. But in gold stores, the scope of price negotiation is not particularly large.
The international price of gold is still growing at a high level. Although the global economy is returning to positive growth and the international situation has eased, the core issues in future development have not yet been completely resolved. The conflict between Russia and Ukraine has not yet reached peace, and the epidemic has rebounded from time to time. Although the value function of gold as a safe-haven asset is indeed gradually weakening, it still needs to wait for the test of time. Once all factors stabilize, the price of gold will gradually reach a low point.
In fact, in the face of the future gold price, the most uncertain factor is to observe the various policies of the Federal Reserve and the degree of control of inflation in the United States. The international gold price is priced in U.S. dollars. To a certain extent, the future trend of the U.S. dollar will adversely affect the trend of gold prices. What’s interesting is that there is a reverse hedging effect between the two, so the future trend of gold is a bit confusing.
The balance sheet shrinkage policy currently being promoted by the Federal Reserve will reduce the supply of US dollars in the global market, increase the exchange rate of the US dollar, and affect the continued decline of gold prices. However, the current inflation rate in the United States is still very high, reaching over 8% for three consecutive months. So will this kind of inflation spread to the world in the future with the international influence of the US dollar? However, if the inflation rate in the United States continues to increase, the actual purchasing power of the US dollar will naturally continue to decrease, which will in turn push the price of gold up.
Overall, the role of gold as a safe-haven currency continues to decline, but the uncertain changes in the US dollar are significantly affecting the price trend of the US dollar. Future estimates suggest that the price of gold should fluctuate between US$1,900 and US$1,700 per ounce in the short to medium term. So it seems that the price is still relatively high at present. Don’t be too anxious to buy it. You can wait and see to a certain extent.
