SMM11 March 26 News: today, precious metals continue to be weak and volatile, but the end of the market quickly pulled up, recovering the downward trend. By the end of the day, the Shanghai Gold 2012 contract rose 0.06% to 381.22 yuan / g. However, recently, due to the impact of the general election, vaccines and other factors, the Shanghai Gold 2012 contract has fallen by more than 8 per cent since its high point on the 9th of this month.
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The world's largest gold ETF-SPDR Gold Trust position is down 4.96t from the previous day, and the current position is 1194.78 tonnes. Due to the continued capital outflow of gold ETF, gold prices may face further downward pressure in the short term. Gold ETF has shrunk for almost 20 days in a row, according to preliminary data. Gold holdings in the ETFSPDR Gold Trust, the world's largest gold trust, are likely to see the biggest monthly decline since 2017.
The current correction in the precious metals market has led to a divergence of market views. Some investors believe that affected by the vaccine news, the gold market has entered a new stage. If US long-term real interest rates remain at current levels, it will be difficult for gold prices to break back above $1900 and $2000 an ounce. Coupled with the fact that the election could lead to Republican control of the Senate, a massive fiscal rescue package is less likely. Another part believes that the price of gold fell after positive progress in novel coronavirus's vaccine research and development, a phenomenon that belongs to a price correction rather than the beginning of a bear market. Vaccine news has reduced safe-haven demand for gold, but sustained re-inflation will eventually be the main driver of gold prices in the future, and bargain-hunting can be considered.
In terms of the dollar, the Labor Department reported a further increase in initial jobless claims last week, suggesting that a surge in novel coronavirus infection and business restrictions are driving layoffs and undermining the recovery of the labour market. And Yellen may take office as the new Treasury Secretary and the Biden administration, raising expectations of a resumption of fiscal stimulus in the United States. And given that the novel coronavirus vaccine is unlikely to be widely vaccinated before the second half of 2021, the world's major central banks will remain loose. Gold prices will be supported by central bank easing and a weak dollar.
