At the beginning of this month, the international gold price hit a record high, accompanied by the warmth of gold consumption, and people’s enthusiasm for buying gold. Just when the market thought that the price of gold might continue to soar, the international gold price adjusted downward from a high level, and then On May 17, it was the lowest since the end of March.
In the blink of an eye, the price fell to the lowest price in seven weeks. What happened behind the roller coaster trend of the international gold price? At this price, would you still buy gold?
The price of gold has a roller coaster trend
If it was placed at the beginning of the year, few people would have thought that such a trend would occur in the price of gold this year.
At the beginning of the year, the international gold price consolidated at a high level and fell, and then hit a five-week low price, maintaining a slight fluctuation around US$1,850 per ounce. But after a short while, it began to rise continuously. By April 13, the international gold futures price reached 2063.40 US dollars per ounce, which was only one step away from the historical highest level in August 2020. Although the international gold price fell back in late April, it rose again in May. On May 4, the spot price of gold hit a record high of $2,080 per ounce. On the same day, the price of COMEX gold futures also rose to 2085.40 US dollars per ounce, approaching the highest point in history. The market’s enthusiasm is high, and related ETFs have also surged.
At that time, some institutions even speculated optimistically that US$2,080/oz should not be the highest point of this round of strong gold market, and the highest price of gold this time may reach more than US$2,300/oz. But the market has come out of a U-turn downward adjustment situation. In the past two weeks, international gold prices have been fluctuating and falling. On May 17, New York gold futures fell for the second consecutive trading day and closed at the lowest level in seven weeks. On that day, the settlement price of COMEX June gold futures fell by US$8.10. It fell 0.4% to settle at $1,984.90 an ounce, its lowest close since March 29. Spot gold also fell, closing at $1,981.65 an ounce that day, a one-day drop of $7.53, or 0.38%. Analysts believe that the rise in the US dollar index is the main reason for the decline in gold prices that day.
People’s enthusiasm for gold consumption is high
Although the international gold price has experienced a roller-coaster trend, it is still consolidating at a high level. If you look at the retail consumption side of the market, it is still a phenomenon of hot consumption in the gold market. Trending list.
Yesterday at around 12 o’clock noon, there was an endless stream of citizens inquiring about and buying gold in many shopping malls in Xinjiekou. At the gold jewelry counter in the shopping mall, the current price of pure gold is 576 yuan per gram, but the discount can be reduced to 516 yuan per gram on the spot. In addition, some brands directly offer a 15% discount on on-site consumption. Products such as bracelets, pendants, gold beads, and zodiac gold have attracted more attention. On-site sales Ms. Chen said that the price of gold has been rising this year, and sales are relatively good, and she is often busy. This is not only related to the market recovery and people’s enthusiasm for consumption, but also has a lot to do with the fact that most of the festivals during this period are the traditional peak season for consumption. .
Citizen Huang Lei just bought a gold bracelet for 3,550 yuan. “I mainly think it looks good on it.” She feels that this year, there are indeed more people buying gold jewelry around her. “Everyone sees that the price of gold is rising, so come here to buy it.” It’s the mentality of buying up and not buying down, and I hope it can maintain and increase value.” She believes that another reason is that the design of gold jewelry is relatively fashionable and novel, which attracts many young consumers to enter the market.
Young people are relentless in “hoarding gold”, and traditional consumers are enthusiastic. Coupled with the blessing of the peak consumption season, consumption in the gold market is booming. According to data released by the China Gold Association, my country’s gold market picked up in the first quarter, and gold consumption was 291.58 tons, a year-on-year increase of 12.03%. Among them, 189.61 tons of gold jewelry, a year-on-year increase of 12.29%; 83.87 tons of gold bars and gold coins, a year-on-year increase of 20.47%.
“The price is high, so we should be cautious when investing in gold”
In the eyes of institutions and experts, the reason why the price of gold continues to rise this year is mainly the result of the superposition of these three factors, that is, the risk of the European and American banking industries, the rising risk aversion in the market in anticipation of the Fed‘s interest rate cut within the year, and the continued large-scale purchases by central banks of various countries. The inflow of gold drives up the price of gold. The reason for the adjustment of the gold price is simply related to the recent strengthening of the U.S. index, the easing of market risk aversion factors, and the need for objective adjustment of the high gold price.
After the gold price rose, many investors had high expectations for the continued rise of the gold price, but the market trend has its internal logic. Although the current macro factors driving the gold price still exist, it will take time to release short-term risks.
Dr. Jiang Zhaoyi, vice president of the Jiangsu Financial Research Institute, said that the price of gold in this position is relatively high, so we should be cautious and diversify investment risks. Investing in gold, the value preservation of physical gold is not easy to realize, and even if you want to buy it, you must buy products from big banks and large companies, and the risk is relatively small.
Experts do not recommend that some citizens hope to maintain and increase their value by purchasing gold jewelry. Jiang Zhaoyi believes that gold jewelry is not a standard gold investment product, and attention should be paid to whether there are recycling channels and how to recycle it, especially for gold jewelry that is priced by piece. If you invest, you should pay more attention to recycling issues.
