SMM9, March 11: since mid-August, the trend of international gold prices has begun to stabilize. On the one hand, Russian President Putin announced in early August that Russia's first novel coronavirus vaccine had been approved by the Ministry of Health and the failure of a new round of fiscal stimulus in the United States at that time triggered a sharp fall in precious metals. On the other hand, the US dollar continued to decline, coupled with the number of outbreaks in the United States, Europe, India and other countries continued to hit record highs to support gold prices. After the global gold price surged to a multi-year high in early August and then fell back short-term, the futures price for nearly a month has hovered between $1900 and $2000 an ounce. Even in the event of a long-short standoff, the market still has rising expectations for precious metals.
The main force of COMEX gold
In terms of economic policy, the ECB maintains the main refinancing rate of 0%, the deposit convenience rate of-0.5%, and the marginal lending rate of 0.25%, in line with expectations. The statement said that the size of the emergency anti-epidemic debt purchase program (PEPP) will remain unchanged at 1.35 trillion euros, and the PEPP plan will last until at least June 2021. The net purchase under the asset purchase program will be 20 billion yuan per month, and an additional temporary purchase of 120 billion yuan will be made before the end of the year. QE will continue until interest rates are raised. Interest rates will remain at current or even lower levels until they are close to the inflation target.
In terms of positions, gold-backed ETF and similar products increased by 39 tons in August, the ninth consecutive month of net inflows, but the lowest level since 2020, according to the World Gold Council. So far this year, global gold ETF inflows have reached a record high of 3824 tonnes, with a net inflow of 938 tonnes.
In addition, the core driving force supporting the continued rise in gold prices remains. That is, in the era of low interest rates of the Federal Reserve, there is still room for real interest rates to go down, which is the core driving force for the rise of precious metals; and the uncertainty in the global market caused by the epidemic is still unavoidable, and safe-haven investment will still periodically boost the price of gold. In addition, the late US election, international economic and trade frictions, geopolitics and other risk events may once again detonate the gold price.
Most analysts are optimistic about the late trend of gold prices:
Talley L é ger, an investment strategist at Invesco, said that as gold prices remain above the key $1900 / ounce, its long-term upward trend will not change in the short term.
George Gero, general manager of wealth management at Royal Bank of Canada, said falling gold and silver prices would attract bargain buyers, with a future target of $2000 an ounce and $30 an ounce, respectively.
(ANZ), an ANZ bank, said gold would be supported by a large money supply, lower interest rates and macro uncertainty. "demand for physical gold is picking up, and the price of gold can rise to $2300 an ounce next year."
Ding Peizhou, an analyst at CIC Anxin Futures, believes that on the whole, due to the second impact of the epidemic, this will slow down the perspective of local and national economic recovery to a certain extent. As a result, the road to global macroeconomic recovery has become more complex and rugged. It is inevitable that the periodic economic development slows down or repeats. In this process, in order to effectively support the economic recovery, global liquidity will remain very abundant. Therefore, in this context, the medium-and long-term rising logic of gold prices will not be reversed as the short-term situation changes.
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