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Gold has a higher probability of short-term correction and hedging funds have been deeply involved.
Jul 29,2020 15:58CST
The content below was translated by Tencent automatically for reference.

SMM7 March 29: yesterday, the outer disk gold price set another record, but after the 2000 US dollars / ounce mark impact failed, gold prices rushed high and fell back. For a time, the precious metal plate fell across the board, and today's precious metal market no longer continues to soar, or even has a downward trend. In this regard, Zhan Dapeng, director of non-ferrous research at Everbright Futures, answered SMM's questions on the relevant market focus:

Will the price of gold continue to rise?

(1) if the short-term rise is too fast, the probability of callback arrangement is high.

I think in the short term, because the rally is too fast, the probability of correction is increasing, just like A shares in July, accelerating the rise often means that a period of market is coming to an end, and the adjustment will come soon, but many people will not think that this will change the bull pattern of A shares. Therefore, the rising trend of the gold midline is still relatively certain, and the main reason is that in the midline logic, the Fed's extremely loose monetary policy is "tied" by the slow economic recovery and financial market turmoil. It is also very difficult to effectively exit next year. Real interest rates in the United States are likely to remain negative for a long time, which provides a time dimension for gold to rise.

(2) Gold can be as high as US $2600 / oz next year.

The upward spatial dimension, because it has set a new record, there is not much that can be compared. To provide a simple algorithm, if we take the amount of money released by the Federal Reserve around 2009-11 (1.6x) and the increase of gold at that time (1.6x) to the present, we can conclude that the price of gold should be around $2600 / oz. For the time being, let's take it as a medium-term target for verification next year. In addition, the rise of gold has been recognized by the market as entering a bull market. Before breaking the long-money effect of gold, a rapid correction in gold is the point of buying bargains, so don't easily predict the end of the bull market here, even if investors think it is coming to an end.

Will hedging intervene?

I think hedging funds are already deeply involved, but the hedging understood by investors may only be the selling hedging of miners and smelters, but in fact, the buying hedging of gold leasing parties and the selling hedging of gold smelters exist in both directions. it is also difficult to predict which side of hedging power is stronger.

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