Recently, as the US dollar index hit a 20-year high, the international gold price was under pressure and continued to decline, and the market fluctuated violently.
htmlOn September 26, spot gold once fell below the important mark of $1,630/ounce, hitting a low of $1,621.06/ounce since early April 2020. Gold has fallen by more than $400, or more than 20%, since breaking through the key level of $2,000 per ounce in March. On September 27, the spot gold price fluctuated around $1,632/ounce, until the reporter's deadline was $1,632.78/ounce.Macro researcher of the Financial Market Department of Everbright Bank Zhou Maohua told the Beijing News Shell Financial reporter that the recent increase in gold prices is mainly due to market concerns about the market Fed radical hikes , driving a sharp rise in market interest rates and weakening the attractiveness of holding interest-free gold.
In addition, the Fed's aggressive water withdrawal and the weakening of non-US currencies pushed the dollar to strengthen, putting pressure on the gold price denominated in US dollars. At the same time, the slowdown in the global economy and the depreciation of non-US currencies also weakened the demand for physical imports of some economies.
USD index rose strongly, international gold prices closed down under pressure
html On September 26, the USD index, which measures the USD against six major currencies, rose significantly, breaking through the 113 mark and setting a new high since May 2002. The US dollar index rose 0.81% on the day and closed at 114.1030 at the end of the foreign exchange market. htmlOn September 22, the Federal Reserve's FOMC meeting in September decided to raise interest rates by 75BP to 3.00%-3.25% and lowered the economic forecast . The interest rate meeting statement reiterated the Federal Reserve's attitude of "not stopping tightening until inflation rate falls back to 2%. Federal Reserve Chairman Powell reiterated his hawkish position after the meeting, while the median forecast for Federal Reserve officials for the end of this year's federal funds rate has risen sharply from 3.4% forecast in June to 4.4%, and the median forecast for the end of next year's federal funds rate reached 4.6%.Even though the rate hike this time meets market expectations, the momentum of the Federal Reserve's aggressive rate hike still triggers market sentiment, and the US stock pullback pushes the US dollar index to continue to rise, and continues to put pressure on gold prices.
Zhou Maohua pointed out that the current financial environment is tending to tighten. Central banks such as Europe and the United States continue to be in a cycle of tightening interest rates, and tightening of the financial environment is not conducive to commodities. The Federal Reserve has aggressively raised interest rates and balance sheet reduction is in its infancy. The ECB has launched interest rate hike cycle . The global risk-free interest rate has not yet been capped in the short term, which will weaken the attractiveness of interest-free gold. The US dollar remains strong, and the Federal Reserve has received good benefits for the US dollar. At the same time, the United States and Europe have significant fundamentals and and policy differences, which continue to be beneficial to the performance of the US dollar.
In addition, Zhou Maohua believes that the prospect of gold demand is weak. On the one hand, as the financial environment becomes tighter and market volatility intensifies, the market pays more attention to liquidity security. On the other hand, the global economic slowdown has also dragged down the purchasing power of physical gold .
USD index will continue to dominate the gold trend. Gold prices may fluctuate sharply in the short term
Everbright Futures pointed out that the USD index continues to rise, and negative suppression of gold prices will always exist. Geographically, the conflict between Russia and Ukraine escalated last week, and the safe-haven attributes of gold prices became the support below the price. However, the influence of prices is less than that of macro sentiment. The short-term US dollar index continues to dominate the gold trend, which is likely to continue to operate weakly.
Zhou Maohua told Beike Finance reporters that it remains to be seen whether the risk of a sharp drop in gold prices has been released recently. As central banks such as Europe and the United States face difficult inflation for decades, these central banks are still in a cycle of interest rate hikes and tightening. High interest rates and global economic slowdown have put pressure on the trend of gold price in . However, unclear factors such as geopolitical conflicts still have certain support for gold, and the short-term gold price fluctuations are relatively severe.
Qianhai Open Source Fund Chief Economist Yang Delong pointed out that from an investment perspective, gold, as a metal species with anti-inflation and safe-haven properties, still has strong investment value preservation function when the economy is bad, but compared with the strengthening of the US dollar, funds are more willing to flow into the US dollar to avoid risk, so the trend of gold is still not optimistic for the time being.
Bank of America Global Research Department expects that the Federal Reserve will raise interest rates by 75 basis points again in November, 50 basis points in December, and 25 basis points in February and March next year respectively. The Fed's interest rate range peak for this round of interest rate hike cycle will reach 4.75% to 5%, higher than the previous forecast of 4% to 4.25%. Wang Hongying, director of the China (Hong Kong) Financial Derivatives Investment Research Institute, told Beike Finance reporter that due to this, the market pressure on gold will further increase, so the trend of gold prices in the fourth quarter is not very optimistic. Gold may still focus on fluctuating and falling.
The time to buy at the bottom has come true? Experts: It is not recommended to blindly buy
. Due to the sharp plunge of international gold prices, the domestic gold price has also declined to varying degrees. According to Tonghuashun data, as of September 26, the main contract for Shanghai Gold Futures for delivery in December fell by 0.66% to close at 384.38 yuan/gram. On September 27, as of the morning closing, the main contract of Shanghai Gold Futures fell 0.18%, closing at 384.16 yuan/gram.
Wang Hongying told Beike Finance reporters that the recent statement about gold bottom buying in the market is mainly based on the fact that the mining cost of gold is at the level of US$1,250 per ounce.
He pointed out that the range of gold decline is limited, so in the long run, the risk of buying at the bottom is not particularly large, but buying at the bottom will lead to the loss of time cost. That is, when US inflation is not effectively controlled, gold is unlikely to show an upward trend. Although the decline space is limited, the efficiency of this kind of investment is relatively low. In addition, investing in gold futures will also bring huge risk of loss of principal, so investors are not advised to blindly buy at the bottom.
Everbright Futures also stated that it does not make much sense to buy gold at the bottom before seeing signs of "hitting the top" of the US real interest rate. On the one hand, the pace of the Federal Reserve's interest rate hike in in the fourth quarter will slow down, but there are still two interest rate hikes. At the same time, the US CPI must be in a downward channel. One rise and one fall has not changed the expectation of the upward trend of the US real interest rate trend, and it also fundamentally restricts the trend of gold prices. On the other hand, the market expects that the United States will fall into recession. If it "come to the point", it means that inflation expectations may quickly turn into deflation expectations, which is also unfavorable to gold. Therefore, except for the formal rebound of phased revisions, gold will still operate in the downward channel.
Zhou Maohua told reporters that in the future, the global geopolitical situation will be complex, the global inflation, economic and policy outlook is relatively uncertain, there are differences in investor expectations, and the market fluctuations are violent. In the short term, gold investment risks are still greater than opportunities, and investors need to enhance their awareness of preventing volatility risks in the gold market and make rational choices. Investors should moderately adjust their position and other positions when market fluctuations are large to enhance investment stability.
Beijing News Shell Finance Reporter Wang Yuchen Editor Xu Chao Proofreading Liu Baoqing
