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SunSirs: Chinese Gold Soared 40.27% in the Past 2 Years
April 27 2020 08:11:56SunSirs(Linda)

Gold prices rose 40.27% in the past 2 years

According to SunSirs data, the domestic gold spot price on April 24, 2020 was 380 yuan / gram, which was an increase of 40.27% from the average market price of 270.90 yuan / gram on April 24, 2018.

Gold historical price chart is as follows:

At present, the price is close to the highest price of the ‘Chinese aunt’ around 2011. Precious metal investors in the capital market have continued to rise in the strategic allocation of gold ETFs under the influence of the great environmental concerns and the weak risk asset market.

Capital market volume and price rise

According to data from the World Gold Council & Shanghai Gold Exchange, as of April 23, the total holdings of China's gold ETFs rose further by nearly 1 ton in April, and this was an increase of about 7.6 tons in the first quarter of 2020. Based on the new increase.

March pits smashed high transaction volume

The price of precious metals fluctuated violently in March, and the mid-term plunge and pulled up again. The high volatility led to short-term and unsteady investor trading. At the same time, the price of gold was strong and unique, plus the largest monthly average discount of domestic gold prices to foreign gold prices. Shanghai's gold morning trading price is lower than the LBMA midday trading price by an average of $ 11 per ounce, which is the largest monthly average discount of domestic gold prices to foreign gold prices since the establishment of the Shanghai Gold Exchange. A series of factors have also driven new investors' trading enthusiasm.

Demand for physical gold is picking up

According to data from the Shanghai Gold Exchange, the gold delivery volume of the Shanghai Gold Exchange rose to 82 tons in March, an increase of 53 tons from the previous month, although the year-on-year data is still poor.

Although the ‘three gold’ market driven by the wealthy Chinese aunts in 2011 is difficult to reshow, as domestic consumer confidence picks up, coupled with the stimulation of consumer vouchers, the Chinese ladies may take over.

Take the second phase of large-volume consumer coupons in Hangzhou as an example. Small gold ornaments with a single product value of 500-1,500 yuan are strongly stimulated by shopping mall discounts, store discounts and electronic consumer coupons. Although small jewelry is half of its value in products and half in processing, demand is still very strong, on the one hand because of the low price of small jewelry and a wide audience, on the other hand, the value preservation is better than other jewelry.

Main factors affecting the recent price of spot precious metals

1. Commodity crude oil trend

Crude oil was originally a special commodity with good liquidity and strong financial attributes. At the same time, crude oil is also a leading geese in the raw material industry and can be used as a reference index for commodities. Crude oil plunge, on the one hand, shows the panic in the capital market, on the other hand, it also reflects the bearish expectations of the international real economy. The rise in risk aversion and the dominant position of gold prices may allow gold prices to benefit from a sharp fall in oil prices.

2. Central bank policy expectations

The continued epidemic situation abroad has led to a weakening of the market's optimism about economic growth, the market is expected to strengthen the central bank's policy operations, the expectation of loose stimulus is increased, the possibility of interest rate cuts is increased, and low interest rates are beneficial to the precious metals market.

3. The popularity of capital markets for gold hedging instruments

Historically, gold is an effective hedging tool. When capital seeks to diversify the risk of a long-term portfolio of precious metals, gold is a key component of the portfolio.

Forecast

Precious metal gold prices are already at historical highs, and the subsequent wait-and-see sentiment fermentation continues. SunSirs analysts expect that the recent highs in gold prices will be strongly volatile.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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