Source: Bloomberg
Author: Mark Burton, Jack Ryan, Yvonne Yue Li
In view of the tension of geopolitical situations and the dim sum of global economic prospects, at first glance, it seems that gold has soared to historical highs.Everyone regards this precious metal as a "shelter", and it is generally believed that when interest rates decline (many investors expect to happen later this year), the price of gold should rise.
However, it will be found that the price of gold suddenly rise is still unclear now.
After fluctuations in a fairly stable range for several consecutive months, the price of gold has soared since March, and has risen by 14%since then, and has repeatedly hit a new high.However, the geopolitical situation has been tight for several months or even years. If there is any difference, it is the Fed's prospect of interest rate cuts in the Fed has become more blurred in recent weeks.So, what happened?
Who is the gold price climbing to an unprecedented height, or what is it?Is it worrying about the central bank that is worried about the US dollar as an economic weapon?Is it a fund that will soon turn to interest rates at the Federal Reserve?Is it a large group of algorithm traders who were attracted to the past alone?Is it stubborn inflation and concerns about hard landing?Is it the depreciation of the currency?Is it an upcoming election?Or is it all above?Experienced business leaders and analysts give various answers.
In order to understand this mystery, industry insiders have carefully studied various trading channels around the world, covering the futures and exchange trading funds (ETFs) from New York to Shanghai, and the huge out -of -field trading center in London -Anyone who sells gold bars, coins and jewelery anywhere in the world sells global networks.
This is an opaque and complex world, which has always been difficult to spy.However, markets and regulatory agencies have been working hard to increase transparency and increase data acquisition channels for many years; these data will help people add a little bit of understanding of gold prices.
Who is buying?
First of all, the obvious answer is: each central bank (especially obvious), as well as large institutions and traders preparing for interest rate cuts.Chinese consumers are worried about the decline in the return rate of other assets and the depreciation of the local currency.On the Reddit platform, the self -proclaimed "collector" preach the accumulation of deposit bars and gold coins.
But these groups have existed as a strong golden promotion force, and there have been several months -the central bank has been a few years -we are not clear, why some of them may have deeper fear, greed or orPassionate buying.The market data held by analysts is complete than ever, but the answer they found is blurred and frustrated: they are buying at the same time, not a certain one.
What are they buying?
One thing is clear but unbearable: investors have not bought ETFs recently -one of the simplest tools for investing in gold.Gold ETFs continued to flow out of funds, indicating that a large group of people have been empty -or cash out.
"This is one of the strangest phenomena I have seen in the ETF field," said Nate Geraci, president of ETF Store."It is particularly interesting that the gold demand of other channels has always been very strong, such as the direct purchase of the central bank and the direct purchase of individuals and private investors."
The net inflow of ETF is obviously weak, and Citi Group's explanation is that long -term investors who bought gold a few years ago made a profit.Joe Cavatoni, the person in charge of the World Gold Association ETF platform, said that stable and large -scale capital outflows did not have a greater impact on prices.Naturally, a buyer.
"There are other investors who buy physical gold, so this will not have any impact," he said in an interview."Guess where it flows: enter the market outside the market and be picked up by the central bank."
Where do they buy?
In large futures and over -the -counter trading markets, trading activities are increasing sharply, which means that common institutions buyers -central banks, investment banks, pension funds, sovereign wealth funds -participation.Objective trading activities are also heating up. As the options traders are scrambling to make up for the risk exposure, the market expects that the price of gold may further rise.
The number of New York Futures has been rising, indicating that the long -term betting of fund managers is increasing.However, the overall transaction volume has exceeded the number of non -liquidation contracts, implying that the kind of crazy day transactions that algorithm funds are good at surge in.
When do they buy?
mainly concentrated on Monday, Wednesday and Friday.As we all know, the gold market is very sensitive to changes in US economic data, and it has been even more so sincerely since the "take off" in March.The key economic reports released on these dates will show the strength of manufacturing, employment, GDP (GDP), and inflation. The buying market that appears after the data is released will provide the market participants that affect the largest market participantsPowerful clues.
But this matter itself has confused analysts, because the recent data has been very strong, and investors in the foreign exchange and bond market will bet on the Federal Reserve interest rate cuts in the Federal Reserve.Essence
Theoretically, this will be empty gold, because high interest rates will weaken the attractiveness of gold assets such as bonds.Investors are still pushing up the US dollar exchange rate, which will make gold more expensive for buyers in the two consumer markets of China and India.
Why do they buy now?
This is the key issue.There is an obvious vulnerability in the narrative in the past five weeks, that is, although the Fed still expected to start rate cuts this year (this should be good for gold), in terms of interest rate cuts, many investors' grasps have not been as big as a few months ago.Essence
One possibility is that some gold investors have focused on the prospects of hard landing in the United States based on the recent data and are anxious to buy gold -shelter.
This can also explain another strange developments in the gold market in recent weeks -a relationship between the golden term price difference between the golden golden period and the Federal Reserve ’s interest rate.
With the rise in spot prices, the percentage yields between the spot of London and the three -month long -term (because of the storage, financing and insurance costs, it often follows the interest rate trend) rarely lower than the Federal Reserve interest rate in recent weeks.EssenceHistorically, this state will continue when the interest rate is at a low level or is about to drop significantly.
This upside down may show that intense investors are now anxious to hold spot gold to resist potential turmoil.
"There are a lot of 'unreasonable reason on this round of rising, especially considering that interest rates are still high," Ole Hansen, director of the commodity strategy of Shengbao Bank, said."I think the narrative is becoming high, and maybe there is still hard landing. At the same time, a large amount of geopolitics uncertainty and de -globalization boost the central bank's demand."
