As the situation in Russia and Ukraine continues to escalate, market risk aversion is heating up rapidly. As traditional safe-haven assets, precious metals are favored by safe-haven funds, and both gold and silver at home and abroad show a rising trend. As of 3: 00 p.m. on the 24th, COMEX gold and silver had risen 1.78% and 2.11%, respectively.
The reporter observed that since the Spring Festival, the price of Shanghai gold futures has climbed from 372 yuan / g to above 397 yuan / g, the highest since January 2021, an increase of nearly 7%. The price of Shanghai silver futures also rose from around 4700 yuan per kilogram to as high as 5158 yuan per kilogram, a new high since November 2021, up about 10 per cent over the period.
Tang Lingzhen, an analyst at Hongye Futures, said Russia is an important oil and gas exporter in the world, accounting for 12% and 21% of the world's exports, respectively. Global crude oil prices have risen more continuously since the epidemic, and escalating tensions between Russia and Ukraine may push up commodity supply premiums and global inflation expectations rise further. "both gold and crude oil have the function of fighting inflation, but energy prices have continued to rise since the epidemic and are now at a high level. Gold prices are relatively stable, and the performance-to-price ratio of gold allocation in the portfolio has been highlighted." Tang Lingzhen said.
In fact, since February, precious metals have risen mainly because of the fermenting situation in Russia and Ukraine. As the situation in Russia and Ukraine heats up, market risk aversion soars, risky assets such as stock markets and digital currencies fall sharply, while gold, bonds and safe-haven currencies including the Japanese yen, the Swiss franc and the dollar benefit higher. In addition, the situation in Russia and Ukraine has also affected the Fed's expectation of raising interest rates.
At the Federal Reserve FOMC meeting at the end of January, Federal Reserve Chairman Colin Powell said that he would not rule out raising interest rates at every FOMC meeting, which led to a significant correction in precious metal prices. However, with the further tightening of the situation in Russia and Ukraine, interest rate hikes are expected to cool down, while inflationary pressure in the United States remains high, and CPI continues to hit new highs, which also increases the anti-inflationary charm of precious metals. " Xia Yingying, an analyst at South China Futures, said.
In Tang Lingzhen's view, the changes in short-term geopolitical conflicts have brought great fluctuations to the market, and the trend of precious metals is strong under the background of strong uncertainty. if the problem of Russia and Ukraine continues to worsen, precious metals will continue to benefit, but if it does not continue to worsen, the volatility of precious metals will weaken. "in the medium term, inflation is still troubling Europe and the United States, reducing downward pressure on gold."
"with the escalation of the war between Russia and Ukraine, precious metals have reversed the previous downward trend, gold and silver prices are standing last year's line, the future needs to pay attention to whether the annual line can stand firm." Wu Jiang, an analyst at CITIC Anxin Futures, believes that to grasp the follow-up trend of the precious metals market, in addition to the conflict between Russia and Ukraine, we should also pay attention to inflation and Fed interest rate hikes, such as runaway inflation or the Fed's attitude is not as tough as it used to be. will help precious metals continue to strengthen. " China Investment Anxin Futures analyst Wu Jiang said.
In this regard, Xia Yingying also believes that the development of the situation in Russia and Ukraine will continue to dominate precious metal prices in the near future. "if the situation moderates or cools down and returns to the level of negotiations, there will be a pullback in precious metals. However, if the situation in Russia and Ukraine deteriorates further, or even turns into an all-out war, then precious metal prices still have a lot of room to rise. However, at present, Europe and the United States may still respond by escalating economic sanctions, and the possibility of getting involved in war is still low, so the risk of precious metals pullback needs to be focused on vigilance. " She said.
In addition, with the approach of the Fed's FOMC meeting in March, market expectations for the extent of the Fed's rate hike in March remain divided. In the turbulent situation in Russia and Ukraine, whether the pace of Fed monetary tightening slows down will also have an impact on precious metal prices.
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