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I'm high! Is it too late for the international gold price to break through the all-time high? Corn price "singing all the way" temporary storage auction is hot.
Jul 28,2020 09:05CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM News: Monday, gold, silver both rose strongly, COMEX gold futures main contract hit 1941.9 US dollars / ounce, a record high, COMEX silver futures main contract soared to a seven-year high. Market participants believe that the recent rise in precious metal prices is mainly driven by strained Sino-US relations, a global easing policy and a sharp decline in the dollar index.

Recently, corn has become a beautiful scenery in the domestic agricultural market with the attitude of "singing all the way". Yesterday, the main corn 2009 contract rose sharply, reaching a price of 2345 yuan per ton, a new high for the year, and closed at 2340 yuan per ton with a 4.05 per cent rise. Under the nine rounds of corn auctions of the State Reserve, corn prices have been sold at a full premium this week, and corn prices have been rising again and again, which market participants say is the expected response of the market to the current shortage of supply.

The international price of gold set a new all-time high, and the price of silver also soared.

The international price of gold and silver has soared again.

Gold and silver both rose strongly on Monday. The main contract of COMEX gold futures refreshed its all-time extreme, reaching an intraday high of 1941.9 US dollars / oz, surpassing the previous all-time high of 1923.7 US dollars / oz. In just four months, the main contract of COMEX gold futures has risen from a minimum of $1450.9 / oz to more than the historical peak, with a cumulative increase of nearly $500USD / oz, an increase of more than 30 per cent.

While the price of gold soared, the price of silver was ignited. According to statistics, in July, the main contract of COMEX silver futures began to rise sharply from around 18 US dollars per ounce, reaching a peak of 24.82 US dollars per ounce on Monday, a cumulative increase of more than 30 per cent.

In this regard, Huishang Futures Precious Metals analyst from Shanshan said that the recent gold price is mainly driven by the continued tension between China and the United States, the global loose policy and the sharp decline of the dollar index. "recently, Sino-US relations have been strained again, and the two sides are related to each other's consulates, so we cannot rule out the possibility that relations may deteriorate again. At the same time, loose policies in the world's major economies will continue. EU leaders reached a historic agreement on a large-scale economic stimulus package on July 21, setting up a recovery fund totaling 750 billion euros, of which 390 billion euros were allocated free of charge and another 360 billion euros were used as loans to finance post-epidemic reconstruction in member states. Congressional leaders are discussing a $1 trillion new stimulus package. Under the continuous easing, real interest rates continue to fall and are bullish on precious metals; in addition, under the influence of factors such as the recent weakening of the US dollar index and risk aversion, the precious metals sector has strengthened again. " She said.

In the view of Wang Jun, a senior analyst at Minmetals Economic and Trade Futures, the recent surge in gold and silver is the result of the recent fermentation of long-term market sentiment, driven by the global novel coronavirus epidemic and the tense Sino-US relations, after the breakthrough of the technical pressure level, the bullish sentiment in the market was ignited and funds poured in, which together pushed up the price of gold and silver. "this is the inevitable result of the loose global monetary policy and the economic downturn, but the funds have chosen to launch the market at this time. If we look at it separately, nominal interest rates on US bonds have not fluctuated much recently, and the decline in real interest rates is mainly driven by inflation expectations. therefore, it can also be said that the recent rise in gold and silver is mainly due to a response to higher inflation expectations. " He said.

In fact, safe haven assets have continued to rise recently, especially in the precious metals sector, where Bitcoin recently broke the $10000 mark. From Shanshan's view, safe-haven assets continue to rise, reflecting the market's pessimistic expectations for the future. Because there are great uncertainties in Sino-US relations, epidemic situation, geopolitical game and macroeconomic recovery, it is a good choice to buy safe-haven assets under this expected background.

However, Wang Jun cautioned that the rise in gold and silver is not necessarily due to the demand for risk aversion. What is closely related to the trend of gold and silver is the real interest rate, which can be divided into nominal interest rate and inflation expectation, and what is related to risk aversion is the nominal interest rate on US debt. "We have found that nominal interest rates have not fluctuated much in the near future. if you avoid risk, the market should first consider buying US Treasuries, but in fact, US Treasuries have hardly fluctuated, and capital sentiment and inflation expectations are related to the recent rise in gold and silver. This actually reflects the concern that inflation is expected to rise because of loose monetary policy in the context of the economic downturn." Wang Jun said.

"from a global point of view, gold prices are likely to continue to hit record highs, and there is still a lot of room above." From Shanshan said that in the later stage, we need to focus on Sino-US relations, with the resumption of work and production in various countries, the global epidemic has the risk of another outbreak, superimposed geopolitical game, the market risk aversion sentiment may be high for a long time; At the same time, central banks around the world continue to implement loose policies, the balance sheets of central banks such as the United States, Europe and Japan have all reached historically high levels, and the European Union, the United States and other recent fiscal stimulus packages, continued easing will lead to a continuous decline in real interest rates, the current real yield on 10-year US Treasuries has fallen into a negative range, which is a long-term positive for gold. Therefore, the main factors that will dominate the trend of precious metals in the future include Sino-US relations, global loose policies, epidemics and geopolitical games.

Corn price "singing all the way"

Recently, corn has become a beautiful scenery in the domestic agricultural market with the attitude of "singing all the way".

Yesterday, the main corn 2009 contract rose sharply, reaching a price of 2345 yuan per ton, a new high for the year, and closed at 2340 yuan per ton with a 4.05 per cent rise. Under the nine rounds of corn auctions of the State Reserve, corn prices have been sold at a full premium this week, and corn prices have been rising again and again, which market participants say is the expected response of the market to the current shortage of supply.

"the temporary storage corn has nine consecutive high sales and a high premium, with a transaction rate of 100%, and the premium is even higher than one wave after another, which to a certain extent stimulates the bullish mentality of the market. In addition, enterprise channel inventory, north and south port inventory remain low, enterprise production has replenishment demand, and a large amount of corn is hoarded in the hands of traders, waiting for sale, as the temporary storage corn auction continues to be hot, traders do not have much demand for storage, there is a long-term plan to store grain. " South China Futures Agricultural products analysts said that in addition to the above two reasons, the rise in corn prices is also related to weather factors. Due to floods in the south, the local spring corn market was affected, and short-term weather speculation pushed corn prices higher. At the same time, it is worth noting that this year is the closing year of the temporary storage corn auction, and the corn auction will be gone. As of yesterday, nine auctions had been completed, and at the rate of 4 million tons per week, this year's temporary storage auction will be completed between late August and early September. In addition, the recovery of live pigs and breeding sows and the improvement of feeding demand have also contributed to the rise in corn prices.

Analysts of South China Futures agricultural products also said that the release of corn from the early auction was slow, with a total of nearly 36 million tons of corn released at 9 auctions, but so far, less than 8 million tons have been released. According to the data released by the National Grain and Oil Information Center, this year's corn supply and demand gap is 25 million tons, and this year's corn supply and demand may be tight, but there will be a shortage of corn supply and demand in 2020 and 2021 due to the lack of temporary corn auctions. The magnification of the gap spurred the spot price of corn to continue to rise.

In the opinion of Wang Na, director of agricultural products of Everbright Futures Research Institute, yesterday's corn market was caused by two factors. On the one hand, there were some uncertainties in Sino-US relations again last week, with the market worried about the impact of tensions in Sino-US relations on related imports. On the other hand, the slowdown in corn imports, coupled with the corn drought in parts of the northeast over the weekend, boosted market bullish sentiment.

"the premiums of temporary storage auctions continue to hit record highs, which to a certain extent has stimulated the psychology of some traders with stocks to accelerate the hoarding of grain. As a result, a lot of quantities in the corn market have not entered the market, exacerbating the rate of price rise. From the 2009 contract to lead the rise can be seen, mainly because of the entire spot supply shortage caused by the market. " Wang Na said.

Wang Na said that the hot sale of corn state reserve auction mainly reflects the psychological expectation of the market, that is to say, the whole market is expected to be in short supply in the coming year, so it will grab grain quickly at this time to prepare for supply and demand for the next year or two. "this rally reflects not only the relationship between supply and demand this year, but also the expectations of the entire market up to 2021. Although the gap this year is relatively small, if the supply is already saturated this year, then the gap next year will be relatively large. " Wang Na said.

In the view of agricultural analysts in South China Futures, corn prices may be strong, but there will be a pullback demand in the short term. In the later stage, we should focus on the following factors: the substitution impact of domestic wheat and rice; the progress of the first stage agreement between China and the United States; the impact of imported corn and corn substitutes on corn spot; the impact of weather change on corn; the specific situation of the restoration of live pigs; the regulation and control of national policies.

As for the market price, Wang Na said that in recent months, contracts are mainly affected by auctions, and the premium of auctions directly determines the mood of traders. Under the current situation of less supply in the spot market, 2009 contracts will maintain a relatively strong pattern, but for Yuanyue 2101 contracts, the uncertainty will be greater. For 2101 contracts, later weather factors will have a greater impact on it, but also need to pay attention to imports, if imports are expanded, then there will be risks for 2101 contracts.

In Wang Na's view, the medium-and long-term bull market pattern of the corn market remains unchanged, and the supply gap is certain and unchangeable in the short term, but there are still some uncertainties in some policies on imports and auctions, therefore, the market pattern of near strength and far weakness will continue.

Most of the non-ferrous plates are stronger.

In the domestic futures market, the non-ferrous metal plate has also become the focus of the market. Yesterday, Shanghai tin main contract 2009 rose 2.82% to close at 146510 yuan / ton, becoming the second largest commodity in the day; Shanghai nickel main contract 2010 rose 2.04% to close at 110140 yuan / ton; Shanghai lead main contract 2009 rose 1.54% to close at 15160 yuan / ton; Shanghai copper main contract 2009 closed down slightly, forming a high consolidation trend.

In this regard, Pu Honggang of Pingtan Comprehensive Experimental Zone Straits Industrial Co., Ltd. said that the impact of the epidemic on the economy has gradually weakened, global monetary policy has been continuously loose, inflation expectations have gradually risen, and the global economy has entered a weak recovery cycle. the marginal demand for basic metals has improved, so the prices of precious metals and basic metals are showing a rising trend.

Copper prices have risen sharply in the early stages against the backdrop of supply-side influence and monetary policy easing. Recently, Sino-US relations have been tense, affected by market sentiment, copper prices have high oscillations, but overall, there is still room to rise in the later stage. " Pu Honggang said that the "Dr. Copper", as the head of non-ferrous metals, is a barometer of macro-economy and is closely related to economic development, monetary policy, fundamentals and other factors. This year, the novel coronavirus epidemic has a great impact on copper mining in Chile, Peru and other copper mines, and the global monetary easing policy has triggered inflation expectations, and there is still room for non-ferrous metals market to rise in the future.

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