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Safe haven was years or dollars over gold below $ 1000

Safe haven was years or dollars over gold below $ 1000

local time, the evening of November 13, France terrorist attack in central Paris, the capital. In accordance with the previous law, the first reaction of commodity is gold and crude oil. This year, however, these rules are broken.  After the terrorist attacks, after international gold rose 10 cents an ounce, on the second trading day once again open the collapsed mode.

previously, market expectations that the Fed will be implemented next month raised interest rates for the first time in nearly 10 years, under the pressure of expected, the night of November 12, gold prices extended earlier declines, breakthrough technology support dropped from 1074.26 dollars, hitting the lowest level since February 11, 2010.  Subsequently, the rebound affected by the emergency, but on November 17, the rebound in international gold prices ended down to 1078 dollars an ounce.

Gold overshadowed

by terrorist attack incident, Monday (16th), international gold prices boosted risk aversion rose to a high of $ 1092.8 an ounce, significantly from last week recorded a 5.5-year low of $ 1073.  Meanwhile, currency markets Asia-pan will be Euro full line pressure.

"contrast after the events of the gold, short term emergency on safe-haven demand for gold has risen, but France is the geographic centre of the euro zone economy, around 5 euro-zone economies accounted for 81% of the ratio, and depend on trade in services (tourism) are high level, this will drag down the euro.  "Futures Research Institute financial Deputy General Manager Zhu Runyu said in an interview with the China Times reporter.  

Zhu Runyu believes that this event will just see the recovery of the euro zone's economy to blow has hit the euro, the dollar some support, is bad for gold, so the terrorist attacks in the short term there will be demand for safe-haven support, but not enough to change the current weak trend, that boost does not have a long history of support.

as we all know, two main value of gold is a safe-haven and inflation. Read the safe-haven, although the current global economic environment is not ideal, but the United States has good scenery, judging from the recent economic data, United States jobs and economic growth were remarkable.  Relative to gold, the dollar's safe-haven role can say no less.

Meanwhile, as the dollar is highly likely to raise rates during the year, Ming fu Xiang Wei, Institute of financial analyst says more dollars shining gold us $ safe-haven role had been completely overshadowed at this stage.  Look at inflation, weak consumption due to global economic crisis, deflation has become one of the world's major economies and the troubling issues, gold's inflation-will not start.   

However, once prime role in safe-haven and inflation are not reflected, how much the price of gold would be good?

Xiang Wei said that if gold is a commodity, then the special factors out of the economic crisis, follows the CPI rise in commodity prices are the most reasonable. We put the time back to before the economic crisis of the end of 2007, when international gold prices to $ 833.3/oz, from 2008-2015, United States CPI increase of only 11% in the same period. If this is any guide, the price is only $ 925 per ounce of gold. Clearly, gold prices dropped below US $ 1000/Oz is certainly possible, in fact back to price, or even fall below the level of early 2008 commodities everywhere.  Raising interest rates as the dollar date approaches, the dollar will rise, gold will be eclipsed if fed rate hike announced in December, the dollar back into the interest rate channel, we believe that the price of gold fell below $ 1000/oz will become a reality.

"from the end of last year, the Fed raised interest rates the suspense becomes foreign exchange, gold investment market is a tough questions such as Goldbach's conjecture. However, to fail again and again because the United States data poor but repeatedly delayed. However, for institutional investors, with the advance of time, Yellen tamp each statement to see more dollars on investor confidence.  "Us financial group special analyst Yang said in an interview.

this year is expected to fall below $ 1000

World Gold Council (WGC) released the latest third quarter of 2015, according to data the gold demand trends report, global Central Bank gold holdings significantly in the third quarter with other agencies, and global gold demand began to pick up in the quarter.   Why banks are overweight, but gold prices still falling?

indeed, as said above, current gold prices, the most important is the loss of its safe-haven role and anti-inflationary effect, resulting in the loss of confidence in the gold market, relatively speaking, instead of supply and demand is not so important.  As for the Central Bank to increase its stake, much of it from China, Russia and other countries, and this confidence in the gold market repair is limited.  

so, as gold market of investors, Xiang Wei think, need concern of on compared simple has, except not predicted of geo political changes outside, we main concern following aspects:

first, fed officials for dollars raised interest rates of attitude, although December raised interest rates of possibilities is high, but is not clinches, if fed again put has a times pigeon, by fool of investors will will revenge, short-term gold soared can period.  

Second, the United States economic data, such as known as GDP, employment data and retail sales continued well dollars will seriously increase the possibility of interest rate hikes.

If the Federal Reserve in December could be clearly raised interest rates, gold prices will be more likely to vote with their feet by investors.  Zhao Xiaojun, futures Analyst believes that the next important thing is not how to go after the move, but a rate increase is not sustainable, this cycle does not mean that the monetary policy of the Fed tightening, but a return to normalization, then once after raising interest rates for the first time, if the economy recovers as expected or the United States itself and the political environment back into the international financial turmoil, this cycle will stop at the first time.

Zhao Xiaojun said unsustainable rate hikes even if gold prices fall below $ 1000/Oz, is more suitable for medium-and long-term investment. As far as price, have gradually joined the rate hike expectations, raising interest rates for the first time achieved will test us $ 1000.

short-term gold in close early bottom with terrorist attacks event Hou has rebounded, is expected to again returned to 1100 dollars/ounces, but near December and non-agricultural data of time window, coupled with copper recently again plunged by representative of bulk commodity of continues to flagging, cannot to gold brings active effect, at least medium-term below 1000 dollars/ounces is has may of, but also to concern with of brings of long-term investment opportunities.

 

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