Gold Surprises Rare Decline Chinese Aunt Opens "buy buy Buy" Mode
The news that Xiamen aunt bought gold bars for one million yuan brought some warmth to the frozen gold market.
It is reported that as the price of gold fell to a low level in ten and a half months, many gold investors acted quickly. In the past few days, several "Xiamen aunts" have been buying gold. Among them, an "aunt" bought 3.75 kilograms of investment gold bars in a bank in Xiamen for a total price of 1 million yuan.
Since Trump won the US presidential election on November 8, the US dollar index has risen by 5%, while the international gold price hit a peak of more than $200 that day, and last week, it hit a low of $1,122.35 per ounce for more than 10 months.
Some market participants have analyzed that in terms of value investment, the current price of gold and silver is close to the cost price of mining, and there is not much room for further decline. In this context, China and Indian-dominated major gold sales markets are about to usher in a buying boom. Especially in China, near the end of the year, there are many festivals, and the golden aunts have begun to itch to try. Reflected in the price of gold, the current price of London gold is weak, indicating that "Chinese aunt" and "Indian uncle" have begun to enter the market.
Gold was shocked by a drop of $200.
Since Trump was unexpectedly elected president of the United States, the global gold price has started a crazy decline mode, and has retreated the increase in the first half of the year in one fell swoop, falling more than 200 dollars since the beginning of November. According to industry analysts, the main reasons for the decline in gold prices include that the US economic recovery is expected to strengthen, the Federal Reserve completed the interest rate hike in December and made positive remarks, and the physical demand in India is weak.
Looking back on the coming year of 2016, the performance of gold can be described as ups and downs: the first half of the year was hot. Since the Brexit in July, the price of gold reached a one-year high, while in the second half of the year, it went out of the opposite trend, with the price of gold falling endlessly and hitting new lows all the way.
Yang Yi, an analyst at Meichuang Huanyu, told china securities journal that the market agreed that the policies implemented by Trump after he took office would accelerate the recovery of the US economy, and then the Federal Reserve raised interest rates for the first time in the year, raising interest rates by 25 basis points to 0.5%-0.75% in December, raising the long-term federal funds interest rate to 3%, becoming the second interest rate increase after the subprime mortgage crisis in 2008. At the same time, the interest rate hike cycle is expected to strengthen, and the US dollar index hit a new high, trading around 103 points, hitting a new high in 2016. "Generally speaking, because the trend of gold and the dollar is in the opposite direction, while the US dollar index hit a new high, gold was suppressed by it, and the price continued to fall. The intraday market went out of a roller coaster-like market. So far, gold has almost retreated all the gains." She said.
Gong Wenjia, a researcher at Shiyuan Jinxing, believes that after Trump was elected president of the United States, the market expected the direction of the American economy, especially the illusion of its tax cuts and manufacturing return, which promoted the rise of risky assets.
In addition, India’s physical demand for gold has also declined this year. The high volatility of gold price and the Indian government’s crackdown on black money have weakened the demand for gold. In the first nine months of this year, the country’s total gold consumption was 442.3 tons, which was about 30% lower than the same period of the previous year.
Holiday demand is expected to start.
This year’s New Year is approaching, and it is the Christmas holiday in the west. The major shopping malls are full of festive atmosphere. However, the reporter found from the gold market such as Beijing Caibai that the number of uncles and aunts who came to buy gold did not increase significantly compared with the past.
An on-site staff member told china securities journal that most investors have made profits, and the short-term gold trend is subject to the fluctuation of the dollar at the bottom, so the market trading is very light. At present, the whole market is on the sidelines, and Chinese aunts are no exception. With regard to the trend of gold in 2017 and the upcoming consumer holiday in China, he predicted that the trend of the US dollar will "peak" in the future, and the overall fundamentals of gold are slowly improving. Under the influence of various favorable factors, the market will once again see the figure of Chinese aunts, and gold may close up to welcome the New Year.
Yang Yi, who has been engaged in gold market research for a long time, believes that the demand for gold in China market will increase as the Spring Festival approaches. At the same time, the gold price has continued to fall recently, and the RMB is also depreciating against the US dollar. These factors have caused Chinese aunts to start snapping up the mode one after another.
She said that on the one hand, the demand for gold by mainland residents represented by "Chinese aunts" is increasing periodically as the Spring Festival is approaching at the end of the year, and on the other hand, the scale of gold outflow from gold exchanges in the domestic financial market is reaching a record high; Chinese aunts are about to start the "buy buy Buy" mode. However, similar to the bargain-hunting at the end of 2015, this time the aunt entered the market to buy gold at a time when the Federal Reserve raised interest rates and the RMB exchange rate plummeted. In particular, the "boots" of the Federal Reserve’s interest rate hike have already landed, and the expectation of interest rate hikes is gradually dissipating. As long as the gold price shows signs of rebounding, the Chinese aunt will act immediately.
Zhou Yupeng, a precious metal analyst at Netease, believes that in terms of value investment, the current price of gold and silver is approaching the cost price of mining, and there is little room for further decline. In this case, the main gold sales markets, mainly China and India, are about to usher in a buying boom. In China, near the end of the year, there are many festivals, and gold aunts in China have started to buy gold. Reflected in the price performance, there has been a short-selling phenomenon in London gold, indicating that China Golden Aunt and Indian Gold Uncle have started to enter the market.
The hunters should be careful.
Many analysts said that after Trump was elected president, the market’s confidence in the US economic recovery increased and the US dollar was supported. At the same time, the Federal Reserve completed the interest rate hike in December, and said it would increase the rate hike in 2017. In an environment where the dollar is strong, it is more likely that the price of gold will continue to fall.
"In the last week of this year, the risks faced by the gold market are still biased downwards. In addition, this week is Christmas Day and the end of the year is approaching. The trading of precious metals will be relatively light, and it will also face the selling pressure of clearing accounts at the end of the year. Therefore, hunters should be careful." Yang Yi said.
She believes that the trend of international gold prices is constantly declining due to the interest rate hike by the Federal Reserve and the US presidential election. US stocks and the US dollar are already high, facing the pressure of callback. In particular, the US dollar has hit a 14-year high, which is also the high level after the US election. It will face certain resistance if it continues to rise. At present, it is difficult for the US dollar index to reach a new high. Although the gold price trading is weak around $1,135 and there are signs of a slight rebound, the trend is still not optimistic. At present, the gold bull market still lacks fundamental support. Next year, basic fabrics will tighten, and gold production may decline. However, the currency problems of China and India’s major consumer countries may cause investors to buy gold to hedge and boost demand. It is still too early to bargain-hunting.
Gong Wenjia said that from a technical point of view, it has been fluctuating at 1120-1150 USD/oz for many days, and whether the bottoming can be successful needs further confirmation. Therefore, considering comprehensively, it is more likely that the price of gold will continue to fall under pressure.
Will it shine again in 2017
"There is a rule in the gold market, that is, whenever the US president changes people, it is not far from the low point of the gold market." According to market statistics, George W. Bush came to power in 2000, and in 1999 and 2001, it was the time when the price of gold hit a multi-year low of more than 250 US dollars per ounce and made a double bottom. In 2008, when Obama came to power, he was catching up with the financial crisis. The price of gold dropped by more than 30% from the high of $1,032 per ounce to $681 per ounce. Trump was elected president this time, after the gold price hit a five-year low of $1,042 per ounce at the end of 2015. But it seems likely that this is not the lowest point, and the gold market is likely to go out of the double bottom again. The reason is that the Federal Reserve just raised interest rates for the second time in 10 years, pushing the dollar higher, and plans to raise interest rates three times next year. The US dollar index rose from 98 to 103, a 14-year high. After Trump takes office, he will implement measures such as tax cuts and increased investment in infrastructure, which may promote the good expectations of the economy and make the gold market not optimistic.
However, Zhou Yupeng believes that the long-term devaluation of currencies is a trend due to the currency overshooting in various countries, and gold is bullish as a value-preserving variety for a long time. In addition, there are still many risk events that can be expected in 2017. The European election year is coming, populist forces are on the rise, and the voices of countries demanding to leave the European Union are rising. In 2017, the safe-haven demand for gold may be pushed up, thus prompting the price of gold to rise. Recently, terrorist attacks around the world have continued, which has also pushed up the safe-haven property of gold and pushed up the price of gold to some extent.
He said that from the perspective of long-term investment, the future bullishness of gold is the theme. Don’t be confused by the immediate setbacks. You can start with some gold by holding it in batches, so as to protect your asset value in the future inflation.