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Original title: The price of gold has fallen by almost 10% compared to three months ago, will it go down or go up again next year?
Image source: Visual ChinaReporter | Xu Ning
With the expectation that the world economy will recover next year, many institutions remain optimistic about the potential upside in gold prices.
Recently, the news of the accelerated landing of the new world crown vaccine and the improvement in world economic expectations have caused a sharp drop in the price of gold.
At 7:00 p.m. on December 11, the international spot price of gold was $ 1,833.24 per ounce, a decrease of 0.22% compared to the previous day; compared to the August high of $ 2,031.1 per ounce, a drop of nearly 10%.
On the same day, Zhang Wenbin, deputy general manager of the marketing department of Xiamen Gold Investment Co., Ltd., said in a live broadcast on Sina Finance that as the impact of the new corona epidemic gradually reduces, it will be negative for gold prices.
But he believes that the impact of the new corona epidemic on the global economy is far-reaching. Even if the epidemic eases next year, it will be difficult for the global economy to show a retaliatory V-shaped rally.
Zhang Wenbin predicts that the global economic context next year will show the characteristics of high debt, low interest rates and low growth. The continued expansion of the scale of global negative rate bonds, the Fed’s stimulus to inflation, and the global economy at the bottom will support gold prices.
He believes that from a long-term trend, gold may still hit the maximum target of $ 2400-2500 per ounce in the future.
John Laforge, Wells Fargo’s head of physical assets strategy, also holds the same view.
According to the precious metals industry news and price information website Kitco News (Golden Country) reported on December 10, Wells Fargo Bank expects the world economy to grow 5.2% next year.
John believes that although the world economy will grow next year, low interest rates and loose monetary policies are expected to still support the prices of precious metals such as gold, silver and platinum.
John said: “There is still a lot of money printing business going on, which will benefit gold and silver.”
According to Wells Fargo Bank, the price of gold will rise to $ 2,100-2,200 an ounce by the end of next year.
Earlier, Hu Min, CEO of Heraeus Precious Metals China, also told Jiemian News that US President-elect Biden appointed Yellen as US Secretary of the Treasury, and the market was bullish on the fiscal stimulus. after he took office.
Heraeus believes that the relaxed environment of low interest rates will benefit the performance of gold in the medium and long term.
Although the general outlook for gold is optimistic from institutions, there are risks.
Wells Fargo said the biggest resistance to gold and silver next year could be rising interest rates. If inflation falls below 2% next year, an increase in nominal returns can lead to an increase in real interest rates.
The real interest rate refers to the rate of return after deducting the inflation factor. Because gold has safe haven properties, gold price trends are highly negatively correlated with real interest rates. The rise in real interest rates will have a negative impact on gold prices.
Since the beginning of this year, the price of gold has risen considerably.
On August 7, the spot price of gold rose to $ 2,075.47 an ounce, setting a record. This is an increase of more than 40% from the price of US $ 1,450 per ounce during the low period in mid-March.
Subsequently, the spot price of gold began to recede and fell below the $ 2,000 mark. In late September, the spot price of gold fell to $ 1,848.6 per ounce, hitting its lowest level in two months.
Sina Statement: This news is a reprint of Sina Cooperative Media Posting this article on Sina.com for the purpose of conveying more information does not mean that I agree with their views or confirm their description. The content of the article is for reference only and does not constitute investment advice. Investors trade accordingly at their own risk.
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