The U.S. market was quiet overnight, continuing the previous Asian and European time trading trends, fluctuating within a narrow range between 1316-1330. The Consumer Confidence Index of the U.S. Consultative Chamber of Commerce announced at 22:00 yesterday evening Beijing time was 80.3, expected to be 81.4, and the previous value was revised up to 82.1. The confidence index has fallen from a five-year high, showing signs that the US economic recovery may slow down. The previously announced US housing data also reflected that the recovery process may be repeated. According to the data, the monthly rate of the house price index in the 20 major cities in the United States after the seasonal adjustment in May S&P/CS increased by 1.0%, which is expected to increase by 1.5%, and the previous value increased by 1.7%; the monthly rate of the unseasonally adjusted house price index increased by 2.4%, and the expected increase was 2.3%. At the same time, the monthly rate of the seasonally adjusted house price index in 10 major cities in the US in May S&P/CS increased bSpot precious metal pricesy 1.1%, and the previous value increased by 1.8%; the monthly rate of the unseasonally adjusted house price index increased by 2.5%, and the previous value increased by 2.6%. However, the lower-than-expected data did not affect the gold market too much. Market participants are all eagerly waiting for the arrival of relevant employment and macroeconomic data, as well as the interest rate resolutions and post-conference announcements of central banks. Light trading limits the volatility of gold. In addition to the discussion of the scale of asset purchases, the current market's speculation about who will take over the current Federal Reserve Chairman Bernanke after January 30, 2014 is gradually emerging. Although President Obama has not made any effective hints to the outside world about the proposed candidate, in the eyes of the public, Janet Louis Yellen, the current Vice Chairman of the Federal Reserve, and Lawrence Summers, Director of the National Economic Council, will be in this position. The most favorable contender. Janet Louis Yellen, PhD in Economics from Yale University, Professor Emeritus at the University of California, Berkeley, and Chairman of the 18th Presidential Council of Economic Advisors nominated by President Clinton. Yellen is a representative of the Fed’s doves. She believes that the biggest problem in the U.S. economy is the high unemployment rate. Even after several rounds of stimulus policies aimed at lowering the unemployment rate, Yellen still believes that the high unemployment rate will continue. Deflation prevention remains the top priority of the US government. She refutes the view that deficits will inevitably lead to high inflation and defended loose fiscal and monetary policies. Foreign media generally believe that if Yellen succeeds Bernanke, the quantitative easing policy will not change much. Lawrence Summers comes from a famous American financial family. His parents are economists and professors at the University of Pennsylvania. His uncle Paul Ann Summerson and his uncle Kenneth Joseph Arrow are both Nobel Prize winners in economics. Summers assumed the post of Secretary of the Treasury in 1999, and subsequently served as the President of Harvard University and a member of the Joint Council of Distinguished Persons, responsible for overseeing the work of the United Nations Committee on Trade and Development. In 2008, Summers served as the economic adviser to the Obama campaign, and in 2009 became the director of the White House's National Economic Council. As a representative of the hawks, Summers scoffed at the continued use of monetary means to stimulate the economy. He once said at the Fed’s internal meeting that QE’s effect on economic stimulus was not as great as imagined, and that the market seriously underestimated the Fed’s pace of changing monetary policy and at the same time underestimated its impact on interest rates. In addition, Summers' worries about inflation caused by QE are always expressed in his words. Summers is a student of Robert Rubin, former US Treasury Secretary. The outside world believes that Obama has a preference for the Rubin system, but when the US economy is struggling, Obama may also avoid danger and make a different choice. But in short, if Summers succeeds in taking over as chairman of the Federal Reserve, the current monetary policy may soon face drastic changes. The impact of the Federal Reserve's monetary policy on the US dollar and precious metals is obvious. In the coming period, the overt and secret battles for the chairmanship of the Federal Reserve will become more intense, and the market will fluctuate accordingly. Gold is currently running in the rebound channel formed after hitting $1180, and it is also in the downward channel formed since the April crash. In the future, whether it is to reverse the current decline and continue the trend of the previous 10 years? Or will it continue to go down with the trend of the near future? The Fed will play a vital role. As the core of the Fed, the expectation of the chairmanship until it is finally determined has become more and more interesting.
Judging from the gold price trend so far in the second half of the year, central banks in the first half of the year are still looking forward to increasing their gold holdings. As Standard & Poor's downgraded the US sovereign credit rating, the price of gold rose sharply in the first few trading days of last week, and the wide fluctuations in the stock and foreign exchange markets made safe-haven funds flood into gold. Despite the recent correction, the price is far above the original purchase price of central banks.
In terms of geopolitics, Russian Foreign Minister Lavrov yesterday said in a speech on the situation in Ukraine that if the Kiev authorities end their military operations in the southeast, the militias in the region will also cease operations. However, the current situation has prevented both parties from communicating normally, which is very likely to expand the situation in the future and have serious consequences. In addition, Lavrov warned that if Ukraine signs a joint agreement with the European Union, Russia will cancel its most-favoured-nation trade mechanism. Regarding the establishment of humanitarian corridors in southeastern Ukraine, Lavrov gave support, but also warned Poroshenko not to equate the establishment of humanitarian corridors with military operations.
In the short term, with the implementation of QE3, the quantitative easing policy will intensify the market's inflation expectations, and gold will also usher in a period of sharp rise. The international gold price will enter the eighteenth century. Jinding Group President Li Hengdi said that in the long run, the international credit system will continue to be turbulent. International credit currencies represented by the euro and the US dollar will not escape the fate of devaluation. The opposite of the gold price must rise. The tide of asset reserve adjustment and strong investment demand will also continue to push up gold prices.
MKSCapital also said on Friday that demand for physical gold in Asian countries remains strong. The company pointed out that Hong Kong gold dealers and jewellers are still full of out-of-sales of gold bars and coins, but the shortage may slow down next week as the supply of new goods arrives. In addition, the gold exchange also showed strong demand, and the premium level is still high.
Global inflation, quantitative easing, and the prospect of economic downturn have made gold's anti-inflation and risk-haven functions sought after by investors. In terms of seasonality,'Golden Nine Silver Ten' will soon enter the peak season of annual gold demand. In the long run, the oversupply of globSpot precious metal pricesal currencies, the prospect of inflation, and the economic downturn will be the fundamental factors supporting the long-term rise of gold. Zhao Wei, an analyst at China Merchants Bank, said that as long as the market fundamentals remain unchanged, gold is still a relatively stable investment tool.
The recent performance of gold and silver is eye-catching. Shanghai Bank rose for five consecutive days last week, with a cumulative weekly gain of 8.08%, and New York silver futures’ cumulative gain was as high as 9.34%. The analysis believes that whether the Fed launches QE3 has become a major factor in determining the trend of gold and silver: if QE3 is pushed, there is huge room for gold and silver to rise in the future. Otherwise, the recent sharp and rapid rise will be unsustainable, and there will be adjustment pressures in the short and medium term.
In order to implement the rectification of the China Securities Regulatory Commission, we must focus on the two key points of encouraging spot withdrawals and honest trading. As long as the exchange is conducive to the right to speak of metal products and is conducive to market efficiency and integrity, I agree with both hands. If the rectification of the exchange is led by the China Securities Regulatory Commission and replaced by the local government, the counterfeit exchange will make a comeback, and gambling and other gambling methods will spread on the exchange. The rectification will become the self-entertainment of the CSRC.
On Wednesday (June 26) in the Asian market in early trading, the spot gold price fell again. It is now trading at around US$1260/oz, and spot silver (Tiantong Silver) has dropped to 3806 yuan/kg. The strong performance of a series of US economic data released overnight has consolidated investors' expectations that the Fed will reduce stimulus measures, and gold and silver prices continue to be under pressure. In addition, at least seven investment banks collectively lowered their gold price expectations earlier this week, making the gold market's bearish sentiment worse.