Source: Global Times
[Global Times Comprehensive Report] Rising interest rates have reduced the attractiveness of gold as an investment. The gold market is undergoing a global migration - Western investors sell gold, while Asian buyers take advantage of the opportunity of gold price plummeting to buy cheap jewelry and gold bars. At the same time, many Asian central banks are accelerating the pace of "stopping gold". Bloomberg reported on the 10th that data from the Chicago Mercantile Exchange Group and the London Gold Market Association showed that since the end of April, more than 527 tons of gold have flowed out of the New York and London vaults that support the two Western largest markets. At the same time, gold imports from Asian gold consumer countries such as China are increasing. Industry experts told the Global Times reporter that gold "flows to the East" reflects a changing trend in the global economic pattern.
Data picture Source IC photo
Asian countries have strong gold demand
Global Times reporter found from the data released by the official website of World Gold Association that in July, the import volume of China's gold reached 178 tons, an increase of 111 tons from the same period last year, the highest import volume in July since 2017. The latest data released by the World Gold Council also showed that in August, the Shanghai midday benchmark gold price (SHAUPM) denominated in RMB rose 0.5%, while the London early gold price (LBMA) denominated in USD fell 2.6%; the average spread rose to $10.6 per ounce, up $4.8 per ounce from the previous year. The organization believes that the strong Chinese gold consumption is one of the reasons why domestic gold prices perform better than US dollar gold prices.
Many Asian central banks were also buying gold in July. According to data from the World Gold Council, global central banks' gold demand remained strong in July, with gold reserves increasing by 37 tons (net increase). In July, Qatar's central bank's official gold reserves increased by 15 tons, becoming the largest gold buyer this month. Reserve Bank of India is an old gold buyer in Central Bank . It purchased 13 tons of gold in July, the highest monthly gold purchase volume since September 2021 (19 tons of gold purchase). Its total gold reserves also reached 781 tons, with a cumulative increase of 27 tons since the beginning of the year.
html In July, the Turkish Central Bank officially increased its gold reserves by 12 tons, which was basically the same as the bank's average monthly purchase volume this year. It has accumulated 75 tons of purchases since the beginning of the year. The bank's official gold reserves in July were 469 tons, a record high in two years. The Uzbekistan central bank purchased 9 tons of gold in July, which is consistent with the amount of gold purchases in June.Not only are the central banks in Asia experiencing a gold purchase boom, but Asian consumers' favor for gold has also increased day by day since the beginning of this year. Especially as many Asian currencies are falling into depreciation, gold's attractiveness is getting higher and higher. According to Japan's news agency, gold's popularity in Japan has continued to rise this year due to being regarded as a "safe asset" to prevent emergencies and inflation. Affected by the Russian-Ukrainian conflict and rising global prices, Japan's gold retail prices have remained at a high level since reaching a record high in April.
It is reported that the retail price of one gram of gold (tax included) was around 7,500 yen at the beginning of this year (100 yen is about 5 yuan), but it rose rapidly after the outbreak of the Russian-Ukrainian conflict in February, reaching a historical high of 8,969 yen in April. Affected by the depreciation of the yen, the price of gold sold by the Japanese Tanaka Precious Metals Industry (Tokyo), a company mainly engaged in gold transactions, has remained at around 8,500 yen. A person in charge of the company said that customers selling gold at the beginning of this year accounted for 70% of the total, but in the context of the lack of end prospects in the Russian-Ukrainian conflict, many customers bought gold again after selling it.
"Nikkei Shimbun " recently believed in a report that the situation of "selling yen and buying gold" reflects the market's uneasiness about the depreciation of the yen. A man in his 50s decided to buy gold at a precious metal shop in Tokyo. He said: "Although the price of gold is very high, in the medium and long term, I think holding gold is more at ease than holding yen."
, head of the Japanese Market Strategy Institute, said in an interview with the Nikkei Shimbun: "Individual investors who judge the value of the yen to lose to gold are beginning to emerge. It is better to say that investors are selling yen than buying gold."The exchange rate of the yen against the US dollar has repeatedly hit new highs, reflecting the market sentiment of distrust of the yen.
General manager of Deli Honkai Hon, which specializes in the manufacturing, processing and sales of precious metals, predicted in an interview with the Nikkei Shizuo that gold prices will remain strong in Japan in the short term. The depreciation of the yen will continue to push up the price of gold in Japan. Even if the yen appreciates, the depreciation of the US dollar will easily cause gold in the international market to rise.
economic rise triggers "gold migration"
"'Shijin East Inspiration' is an old topic in the gold market for decades, especially when gold prices plummet, this topic will be raised. "Lu Chao, a senior analyst of national registered gold, told the Global Times on the 11th that the background of the "big migration" of gold from west to east is the growth of gold demand caused by the continuous rise of in Asia's economy, reflecting a changing trend in the global economic landscape. Lu Chao believes that when the gold price falls sharply, the trend of gold flowing from west to east will be amplified, which will arouse high attention from the industry.
"" After in World War II, more than 80% of the global gold is occupied by Western countries. But as Asian economies gradually rise, demand for gold in these countries is increasing. Because gold is a commodity with both financial and collection attributes, both central banks and private individuals in Asia have huge demands. "Lu Chao told reporters that Asian countries have a natural preference for investment and collection of gold, and China and India have also become the two largest gold consumption countries in the world.
New York and London, as the two largest gold trading centers in the world, bring together gold trading needs from all over the world, and ultimately reflected in the inlet and extraction of their vaults physical gold . Bloomberg reported that hundreds of tons of gold flowed out of the two major exchanges since April, reflecting the market behavior of Western investors selling in the market after losing interest in gold investment.
Bloomberg quoted analysts' opinions and said that most of the precious metals that meet Asian needs came from the vaults operated by the Chicago Commodity Exchange Group , the group supports the New York Mercantile Exchange futures market . Market chaos in the early stages of the outbreak of the new crown pneumonia epidemic has caused a sharp surge in gold prices, forcing banks to establish large amounts of inventory to cover their futures positions . In recent months, the New York Mercantile Exchange's gold trading price is lower than that of London, and these gold inventories are currently decreasing to meet the demand in Asia.
Feder Gold cycle around
Lu Chao analyzed that gold still occupies an important position in the current US dollar-dominated international monetary system , and is in the global The international financial system still plays an unnegligible role. Therefore, in a long cycle, there are still many gold buyers around the world, including central banks of various countries, and there is a demand for buying. The fluctuation of specific gold prices is strongly related to the trend of the US dollar. The fluctuation cycle of gold prices often depends on the looseness and tightening of the Federal Reserve's monetary policy , which has also spawned a bull and bear market in the gold market.
In recent years, the Federal Reserve's monetary policy has been in a cycle from unlimited easing to rapid tightening, especially in August 2020, when the Federal Reserve's unlimited easing policy reached its peak, and the gold price once rose to its peak. With the shift of the Federal Reserve's monetary policy, Global gold prices began to fluctuate and began to fall when the Federal Reserve discussed the interest rate hike in September 2021. After rising due to the Russian-Ukrainian conflict stage in March 2022, gold prices have fallen for 6 consecutive months so far. In contrast, the Federal Reserve has raised interest rates five times in March, with a total of 300 basis points.
Lu Chao analyzed that overall, gold prices have fallen since last year, forming a bear market pattern for the Federal Reserve to tighten the currency cycle. The Federal Reserve has not changed its tough hawkish position, and there is still room for further decline in the future. "Judge the trend of gold prices, we must keep a close eye on the inflation level of the United States, because this determines the direction of the Federal Reserve's monetary policy. ”
