The price of gold has broken through the historical high, but the risks behind it cannot be ignored.
Some time ago, the international gold price brought many surprises to investors. First, it broke through the highest price in history, and then successfully stood at a high price of $2,000 per ounce. Because the performance of gold is so crazy, and many institutions in the early market are still optimistic about the subsequent development of gold, many individual investors began to run into the market, but the good times did not last long, and the price of gold and silver suddenly collapsed. In one day, gold fell by more than 4% and silver by more than 7%. In fact, the value of expensive metals itself needs specific economic environment conditions, and the economic development of most countries is in a particularly severe situation this year. All kinds of situations have pushed up the price of gold to some extent.
The demand for hedging in the market has declined, and the rise in real interest rates has affected the price of gold.
However, when the price of gold reaches a prehistoric high, if it is simply used as an investment, the risk is undoubtedly very great. You can't just see the profitable side and ignore the risks behind it. Especially with the rise of bond yields in the United States and Europe, the yield of US Treasury bonds has reached the highest increase in six months, which has also reduced the attractiveness of gold to investors to some extent. After Trump said that he would cut the capital gains tax, the stock market also saw a wave of climbing. This news weakened the safe-haven demand of the market to a certain extent, so gold fell. The rise of real interest rate is the fundamental reason for the decline of gold, and the strong PPI data in the United States gives the market another reason to reassess interest rates and expectations.
The shortage of funds has become a global problem, and the situation is still favorable for gold.
From the macro environment, the current international trade tension has begun to appear the worst expectation, and the US Federal Reserve's interest rate cut expectation has also begun to reach a general consensus and started to enter the gold price. The price of gold in Asian and European markets is also close to the highest level in history. Therefore, retail investors must be wary of bulls taking the opportunity to take profits, which further increases the bottom risk of precious metals. However, from the overall environment, it is still beneficial to gold, and the bull market tone of gold has not changed. On the whole, the market is in a release period, but from the medium and long-term logic, the overall financial shortage of the market has begun to become a global problem, and the economic growth rate of the United States has weakened, so you have not been effectively solved.