Spot Precious Metals Prices were Weak during the Year, Prices Rebounded in April

The average price of silver in the early trading on May 14 was 5,45.33 yuan/kg, a decrease of 0.87% during the day, compared with the average early morning price of 5321.67 yuan/kg in the spot market at the beginning of the month (May 1), an increase of 4.20%; compared with the beginning of the year (01.01) silver The spot price was 5550 yuan/kg, a decrease of 0.08%.

The spot price of gold on May 14 was 379.5 yuan/g, an intraday increase of 0.13%, compared with the early spot market price at the beginning of the month (5.1) average price of 369 yuan/g, an increase of 2.85%; compared with the beginning of the year (01.01) gold spot price of 392.70 yuan/ Grams, a decrease of 3.36%.

Excessive Overdraft is Expected, Precious Metals Weak Upward

Gold investment demand has continued to weaken in the past six months, but the decline has slowed down; in April, the total global gold ETF holdings decreased by 18.3 tons (approximately US$1.1 billion, and the scale of asset management decreased by 0.5%). The scale of gold ETF assets under management has fallen by more than 20% from the peak of gold prices in August 2020.

However, the trend of central bank net purchases of gold has been postponed; in the first quarter of 2021, global central banks achieved net purchases of 95.5 tons of gold, a year-on-year decrease of 23%, but a month-on-month increase of 20%, which is equivalent to the quarterly net purchases of gold that occurred between 2016 and 2017.

In theory, gold is the latest choice to fight inflation. However, due to the bottoming out in March-April last year and the excessive rebound, investment demand overdrafted ahead of schedule, the price of gold was in the midst of long profits and the high level of correction, and now it has basically entered a long-short platform shock range. The sharp jump in the price of gold has yet to pick up again in gold investment demand, and the current trend is not obvious.

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