CICC reported on July 11 that during the Asian session on Monday (July 11), international gold prices fell back from the high of more than 0.6% earlier, to the current decline of more than 0.2%. The current price fluctuates around US$1,363/ounce, as the collective rise of Asian stock markets has increased market risk preference, but investment banks expect gold prices to continue to rise in the future.
latest market shows that the MSCI Asia-Pacific Index's daily gains expanded to more than 2%. The Japanese Nikkei Index closed up 3.98% during the day, the Korean comprehensive index rose 1.3%, the Taiwan weighted index rose 1.68%, the Australian stock index rose 1.87%, and the A-share Shanghai Composite Index closed up 0.7%.
However, the gold price in the morning continued its upward trend since the late Friday trading, rising to a day high of $1,375.31 per ounce supported by risk aversion. Although the day stock market has risen due to good U.S. employment data, the uncertainty brought by Brexit to the market still supports the rise in risk aversion sentiment and still poses a drag on the Fed's interest rate hike.
Latest news last week showed that the latest wave of "financial aftershock" caused by Brexit is reflected in the UK commercial real estate market. Several British real estate funds suspended trading, causing panic to strike again.
Starting from last Monday (July 4), liquid-depleted Standard Life, Aviva, MG Investment and Henderson Global Investment’s commercial real estate funds have successively announced the suspension of all transactions and prohibit investors from redemption within a certain period of time. The decision locked in about £10 billion in assets, causing concern among investors.
In addition, Brexit also had a negative impact on the euro zone's banking industry, exacerbating the already high risk of the Italian banking industry crisis.
CICC reported last week that the Italian banking industry was under 17% of the non-performing asset ratio, and its total bad debt accounted for about 50% of the entire European banking industry, supplemented by the depression. At the same time, with the negative impact of Brexit on Jiang Road, the stock prices of some Italian banks plummeted by more than 20% recently.
Some analysts bluntly stated that the Italian banking industry has accumulated huge bad debts, which may become the fuse of the "European version of Lehman's moment". If the problem of bad bank debt in Italy breaks out in a concentrated manner, similar to the bankruptcy of Lehman Brothers in 2008, it will cause a fatal blow to Italy's economic and financial system, and will affect the entire European continent.
In view of this, International Monetary Fund (IMF) also lowered its euro zone's economic growth forecast this year and next year, warning that the situation may be worse if the chaos in the financial market continues.
IMF said, "The further slowdown in global economic growth may drag down the economic recovery dominated by domestic demand in the euro zone, and the spread of Brexit aftermath, surge in refugees, rising security concerns and fatigue in the banking industry may all impact the economic growth of the euro zone."
As the negative impact of Brexit on the country and even the euro zone economy continues to emerge, the market's risk aversion sentiment has accumulated for a long time and is difficult to retreat, which in turn has provided support for safe-haven gold. On the other hand, the uncertainty brought about by Brexit also had an impact on the Fed's interest rate hike, although the non-farm data were unusually strong last week.
Last Friday's latest U.S. employment report said that the number of non-farm employment in the United States increased by 287,000 in June, far exceeding the expected increase of 180,000, refreshing the largest monthly increase since October last year, but correcting the increase in non-farm employment in June from 38,000 to 11,000; at the same time, the unemployment rate in June also rose from 4.7% to 4.9%, higher than the expected 4.8%.
In addition, sub-item data showed that the average monthly hourly wage rate in June increased by 0.1%, less than the expected previous value of 0.2%; the labor force participation rate rose to 62.7%, ending the previous decline, with the previous value of 62.6%.
Reuters commented that the largest monthly increase since October last year provided more evidence that the US economy has recovered from the first quarter decline; but given that wage growth remains weak, the Federal Reserve is expected to remain cautious about interest rate hikes.
"Federal News Agency" John Hilsenrath pointed out that the non-agricultural data in June is beautiful, which makes the Fed's interest rate hike in September again. Fed officials are likely to be pleased with the non-agricultural data in June, but they should not be rushing to act in a short period of time.
investment banking views, Deutsche Bank pointed out that non-farm farms are very strong, but the Fed is still expected to raise interest rates once this year; French and Pakistan Bank analyzed that U.S. non-farm employment data shows that employment growth is on a slowing trend, maintaining the Fed's expectation of no interest rate hikes in 2016 or 2017; Citi Bank said that non-farm farms alleviated some concerns about the labor market in June, but given the environment after the Brexit referendum, Citi delayed the expectation of Fed interest rate hikes from September to December; Goldman Sachs also maintained its previous judgment that the possibility of interest rate hikes in 2016 is about two-thirds, as long as December.
CICC reported last week that after the release of this strong non-agricultural data, gold prices once fell sharply by nearly $30, from a daily low of $1335 near $1363. However, after the market fully digested the employment report (the expectation of interest rate hikes will only be once this year and there will be changes), gold prices rebounded sharply to a daily high of US$1,370 and closed up 0.41% in the final session, recording a sixth consecutive week of upside down (for the first time since July 2014).
In this regard, UBS (UBS) analysis pointed out that gold's decline this time was an instinctive reaction because the US employment data exceeded expectations, but the gold price quickly rebounded from a low level, which also confirms the choice of investors entering the market at a low level. There are still many people who want to construct a gold position now, so any retracement will enter.
As UBS said, most of the current market views believe that when the Fed does not raise interest rates for the time being and the negative impact of Brexit on the global economy still exists, every high and falling gold price may be a buying opportunity, and some investment banks predict that gold prices may rise to $1,500 per ounce in the near future.
Royal Bank of Canada (RBC) pointed out in its report that although the strong non-agricultural power in the United States last Friday put the gold price under short-term pressure and decline, the drawdown is an opportunity for gold prices to buy on dips. The trends of the money market and negative interest rates in some parts of the world will cause bottom buyers to enter the market when the gold price is retracing sharply. The bank may increase gold allocation in the third quarter.
Bank of the Netherlands pointed out that given the temporary impact of the Fed's expectation of interest rate hikes next year, it is expected that gold prices will fall in the fourth quarter of the year and the first quarter of next year, which will have an opportunity to buy precious metals, as the long-term trend remains positive.
The Dutch Bank believes that since the Brexit referendum, the demand for safe-haven aversion, market expectations for the Fed's interest rate hike this year and next two years, and the implementation of more easing measures by Japan and the European Central Bank have become the main factors supporting the rise in precious metal prices.
According to the analysis of investment bank Bank of America Merrill Lynch, the situation where the global crisis is expected to follow may not change. At the same time, the negative impact of the global economic downturn and the shift of public discussion to wealth generation/distribution, populism and immigration may have an impact on economic policy formulation. Brexit has also strengthened the view of global economic uncertainty. It is expected that by the end of next year, gold prices will rise sharply by 10% from their current position to US$1,500 per ounce.
The optimistic sentiment of the gold market is also reflected in the gold futures market holdings , gold ETF holdings and the latest gold market weekly survey report.
According to the weekly report released by the CFTC on Friday, as of the week ended July 5, COMEX gold speculative net long positions rose sharply by 13,743 lots to 286,921 lots, which was the fifth consecutive week for speculators to increase their holdings of gold long positions, continuing to set a record high, and previously reached the record highest level for two consecutive weeks.
Another set of monitoring shows that the world's largest gold ETF, SPDR Gold Trust, increased its holdings by 27.35 tons last week, and its total holdings increased to 981.26 tons or 31,548,361.81 ounces, continuing to remain near its high since June 2013.
, and the latest weekly survey of gold markets from Bloomberg and Kitco shows that 60% of professional investors continue to be bullish on the gold price this week, while another 64% of online retail investors are bullish on the gold price this week.
Looking forward to this week, in addition to the U.S. Job Market Condition Index (LMCI) for June (expected 0, previous value -4.8) that will be released within the evening of the day and the speech delivered by FOMC voter Kansas Fed Chairman George, the most eye-catching week is undoubtedly the Bank of England's interest rate decision this Thursday (July 14) (the first rate cut in seven years is likely to be sent, and the general expectation is 25 basis points to be cut).
CICC Market Center data shows that as of 14:26 Beijing time, spot gold was US$1363.26/ounce, down 0.24%.
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