The trend of international gold price changes abruptly. Since the middle of this month, COMEX gold futures have returned to $1900 an ounce since May last year, closing at 1906.10 on February 21, up more than 6 per cent from their low at the end of January. In the past two days, the upward breakthrough momentum of gold prices has obviously weakened, closing down 0.3% at 1900.30 on February 22nd. On February 23, the intraday decline of 1900 was widened to 0.52%. As of this afternoon, it fluctuated in the range of 1896 to 1898.
While international gold prices rose and fell, the A-share gold concept sector also showed a pullback today, closing down 0.19%, up 12.75% during the month.
Market participants pointed out that recently, with the tense situation in Russia and Ukraine, the risk aversion demand makes the influencing factors of gold price tend to be driven by Ledo, but the mood is expected to improve slightly after landing in recent days, and the upward momentum has weakened. Risk aversion triggered by geopolitical concerns will continue to support gold's strength in the short term, but in the longer term, tightening expectations from overseas central banks such as the Federal Reserve remain the main logic.
Although to a certain extent, the advent of the interest rate-raising cycle of overseas central banks has put some pressure on non-interest-bearing gold, some industry insiders believe that the negative correlation between gold prices and real interest rates in the United States will often fail during the interest rate hike cycle. concerns about slowing economic growth and inflation not yet peaking may highlight gold's risk aversion.
Gold prices fell back and risk aversion in the market eased slightly.
Judging from the trend this week, COMEX gold did not stand firm at the 1900 mark, with the biggest drop to 0.86% on February 22nd, and fell further on the 23rd, falling below 1900 at one point in intraday trading.
"the primary reason why COMEX gold failed to continue to rise after 1900 is that the Fed's expectation of raising interest rates in March has always suppressed gold bulls. At present, the market is basically certain for the Fed to raise interest rates in March, and the only issue is the extent of 25bp or 50bp rate increases." Liu Xin of Meierya Futures Company told the Financial Associated Press that in addition, although the conflict between Russia and Ukraine has escalated recently, it is within the range acceptable to all parties in the market. Generally speaking, the expectation of the market for the outbreak of a full-scale war conflict in the future is very low, which has led to a decline in risk aversion.
Everbright futures researcher Li Qi said that in the short term, due to the strong geographical situation, but the geographical promotion of gold is not strong. At that time, the focus of the market may return to the Fed's expectation of raising interest rates, at a time point in mid-early March.
"generally speaking, geopolitical events only produce short-term benefits for precious metals and are not a decisive factor affecting medium-and long-term trends in precious metals." Li Gaofeng, the macro and financial engineering group of Soochow Futures, believes that therefore, the focus of the precious metals market is still on US inflation and interest rates. If the later upward inflationary pressure is out of control, the Fed is likely to raise interest rates and shrink the table more sharply, which will be bad for the price of gold.
From a technical point of view, Liu Xin analysis said that at present gold has been seriously overbought, meaning that the buyer's strength is far greater than the seller's, at this time, the biggest factor of the short-term bulls is the conflict between Russia and Ukraine, but before there is no substantial risk aversion, bulls are expected to push gold prices higher or cautiously, but if risk aversion sentiment is certain to fall back, bulls' profit-taking positions may significantly depress gold prices.
The short-term volatility of gold price is expected to be strong and the impact of raising interest rates in the US may be limited
Looking to the future, industry insiders pointed out that the evolution of the geo-situation in Russia and Ukraine will still be the main line of changes in precious metal prices in the near future, so it is expected that the trend will remain strong in the short term, but the Fed may tighten and start to raise interest rates in March. Gold prices may have limited medium-and long-term upward space.
People in BOC's global marketing department said gold could continue to benefit because of the uncertainty over the geopolitical conflict. But at the same time, high inflation in the US and concerns about the Fed's monetary policy space have weakened the downward pressure on gold, which is expected to remain strong in the near term, supporting the $1820-$1850 / oz line below.
"the weakening of economic growth expectations and rising inflationary pressures will be the main supporting factor for gold prices this year." Soochow Securities macro team pointed out that from the trend of last year, although global inflationary pressures continue to accumulate under the supply crisis, gold prices have not improved since the second half of the year. It shows that in the stage of economic stabilization, the impact of inflationary pressure brought about by a sharp rebound in demand on gold prices is not obvious. However, recently, the World Bank and the International Monetary Fund have successively downgraded their US economic growth forecasts for 2022, and the faster-than-expected year-on-year growth rate of CPI in January has once again boosted market concerns about US inflation. Therefore, under the joint action of the deceleration of economic expectations and the rise in inflation, gold's anti-inflation and anti-risk ability can be reflected, and COMEX gold is expected to break through the 2000 mark this year.
The team further pointed out that although the gold price has a strong correlation with the real yield of US debt, judging from the previous US interest rate raising cycles, especially the gold price performance during the period when the Federal Reserve raised interest rates more frequently this year, the market tends to pay more attention to the impact of interest rate hikes on economic growth, and under this concern, the safe haven nature of gold will be highlighted, so the impact of US real interest rates on gold will be weaker than in the previous period.
