The hard stimulus factors of inflation and foreign exchange reserve diversification may cause the price of gold to continue to rise, and gold will rebound to US$1,450 to US$1,560 per ounce in the second half of the year. Therefore, silver has more investment value than gold, and the investment prospects of silver in 2011 will be better than gold.
After the 2011 Lunar New Year, the People's Bank of China announced on February 8 that starting from the 9th, the one-year benchmark interest rates for deposits and loans of financial institutions would be raised by 0.25 percentage points respectively. This is the first time the central bank has raised interest rates this year and is another measure by the central bank to deal with current inflationary pressures. What impact will the interest rate hike have on the trend of gold? Our reporter interviewed Xia Keyou, general manager of Shaanxi Golden Day Precious Metals Management Co., Ltd.
Xia Keyou believes that the central bank’s interest rate hike this time is just to deal with my country’s inflation. The small drop in the international gold market that day was only temporary. The demand for gold around the world is still strong. The demand for physical gold in countries such as India is very strong, which provides support to the futures market. In addition, the world's major developed economies have not completely emerged from the financial crisis. Judging from the central bank's three consecutive interest rate increases and various measures, the Chinese government's intention to prevent inflation and seek stability is very clear. Although China's inflationary pressure is high, the recent rise in global gold does not come from the impact of China's inflation.
In the long run, the gold market will continue to strengthen. Many gold buyers in the current market are long-term investors. They are optimistic about the long-term trend of the gold market and therefore do not care about short-term market fluctuations. Gold's slight decline on February 9 provided investors with a buying opportunity. Overall, gold will adjust downward in the first quarter of 2011, to between 1,300 and 1,280 US dollars per ounce, and Tiantong gold will be between 277 and 273 yuan per gram. In the first quarter of 2011, the overall trend of gold in February fluctuated within a small range of US$1,322-1,400 per ounce. It will rebound to US$1,450-1,560 per ounce in the second half of the year, and Tiantong gold will be between 310-360 yuan per gram.
Xia Keyou, general manager of Shaanxi Golden Day Precious Metals Management Co., Ltd., believes that the current rebound in gold and silver in the first quarter will not last and the adjustment has not yet been completed. Although gold and silver are still relatively good investment tools, they are different from before. Gold and silver stimulated by the previous economic crisis and the subprime mortgage crisis reflected strong monetary attributes. In the second half of 2011, gold and silver were affected by various circumstances. Gold is still the best safe haven from the financial crisis. We look forward to periodic corrections to ensure a healthy rise in the later period.
Hard stimulus factors such as inflation and diversification of foreign exchange reserves may cause the price of gold to continue to rise. Gold will rebound to US$1,450 to US$1,560 per ounce in the second half of the year. During this period, silver will have more room to rise. In the past 20 years, its industrial use has been far greater than its financial attributes. Therefore, silver has more investment value than gold, and the investment prospects of silver in 2011 will be better than gold.