gold has incomparable strong financial attributes to other commodity metals, and even its financial attributes are the fundamental factors that affect the fluctuation of gold prices. At present, both the central bank and ordinary investors still regard gold as a hard currency that can be redeemed, although with the development of credit currency civilization, the monetary function of gold has faded.
But neither investors nor the central bank will deny that gold is a reliable means of payment in the context of the crisis of credit currency, which is why the central bank still regards gold as an important part of the national reserve. That is to say, the financial attribute is the long-term main clue that affects the fluctuation of gold price, and its operation principle is mainly to hedge the depreciation risk of credit currency.
Although silver, like gold, played a currency role in circulation during the gold-silver standard period, its monetary and financial attributes have been highly diluted compared with gold under the current dollar standard background, and no central bank or many investors will reserve silver for a long time as a means to deal with the devaluation of credit currency. At present, the main factor affecting the fluctuation of silver price is the relationship between supply and demand in the field of commodity physical demand, among which industrial silver has a great influence on silver price. This shows that the fluctuation of silver price is largely dominated by its commodity supply and demand attributes. Of course, we don't think that silver has no financial attributes.
in essence, the financial attribute of silver is more in the minds of ordinary investors, which seems to be a continuation of the concept of inheriting the history and culture of money. At present, the central bank does not agree with the financial attribute of silver. Therefore, the financial attribute of silver is much weaker than that of gold, and the main factor that dominates the fluctuation of silver price is the commodity attribute in the field of physical demand.
Although it seems that the physical investment demand of silver will be exaggerated by financial attributes in some stages, from the subsequent market fluctuations, it seems that investors who bought silver "investment" with excessive financial attributes were finally "cheated" by the main institutions. Think back to the silver bull market in April 211.
At that time, the war in Libya and the ridiculous silver standard storyline made investors who were chasing up and buying silver miserable. Do you remember the silver standard storyline that came out of Utah? At present, they are more like accomplices to help hedge funds wash away ordinary investors.
if the gold and silver standard is restored, then I think that silver will have a better room for growth than gold, because in the past 1 years, the fluctuation of silver was mainly dominated by commodity attributes. If silver is officially recognized as having the same strong financial attributes as gold after the restoration of the gold and silver standard, then silver with smaller market capacity will have more room for growth. However, in the current huge global financial and trade system, is it possible to restore the gold and silver standard?
at most, it's a curiosity story that promotes book sales! Last week, Federal Reserve Chairman Ben Bernanke said that during the Great Depression, the gold standard system curbed the growth of the global economy and failed to prevent financial panic. Because of the gold standard policy, policy mistakes spread in the United States during the depression, and countries that implemented the gold standard were forced to adopt a fixed interest rate policy, and bad policies would spread among countries. In the medium term, the gold standard could lead to inflation and deflation. From a realistic point of view, is it possible to hope that the gold and silver standard will replace the dollar standard under the background that the United States still dominates the world in all fields? Perhaps those who hold this view are worried about the prospect of credit currency in 3 or 5 years, and then instill the idea that the gold and silver standard may be restored, but is it so important to judge what will happen decades later to guide current investment? Who can deny that there will be no "earth dollar" to unify the global credit currency in a few years? At least, we believe that the dollar collapse theory and the gold and silver standard restoration theory should not be the fetters of investors' long-term strategic investment. Therefore, judging the current operating basis of gold and silver market prices, we should still combine and respect the real financial environment system, instead of imagining a future financial environment system and making corresponding investments.
as far as the current gold market is concerned, it will still be dominated by financial attributes, and its leading factor comes from investors' expectations on whether the global credit currency will depreciate relative to the development of the real economy. Judging from the current economic and financial environment, the European economy continues to slow down, and the US economic recovery is in doubt. It is foreseeable that it will be the trend in the next few years for Europe and the United States to further maintain loose monetary policy or continue to release money to stimulate further economic recovery. This means that in the next few years, the growth rate of money supply should be significantly faster than the recovery growth rate of the real economy. Under this background, gold should reflect its function of hedging the depreciation of credit currency and continue its rising bull market.
Silver is different. As the commodity attribute is the main attribute that affects its price fluctuation, the macroeconomic environment and economic cycle will have more obvious influence on the price fluctuation of silver. If the economic situation of the industrial silver environment is sluggish, then the basis for the rise in silver prices will inevitably appear weak. That is to say, the fluctuation of silver price is more influenced by the economic environment, and the corresponding economic environment is better, which will stimulate the demand for silver, so the bull market foundation of silver will be more solid. At this market stage, commodity metals should also benefit correspondingly. Any other silver bull market incited by financial attributes, without the support of the prosperity of silver demand in kind, may eventually be a roller coaster market, such as the silver bull market under the theme of using the war in Libya and inciting the restoration of the silver standard in March and April last year.
of course, in view of the synchronization of gold and silver prices, the fluctuation range will vary greatly in different economic and financial environments. Although we don't think that the financial attributes of silver should be strengthened too much, we can't completely deny its financial attributes. This is the difference between silver and the basic metal under the background of complete commodity attributes. If the price of gold rises greatly under the financial attribute of gold, even if the base metal is constrained by the decline of commodity attribute, the price of silver will rise with the strength of gold to a certain extent, that is, driven by the financial attribute, the relative range may lag behind gold, but it will definitely perform better than the base metal, such as the market in August and September last year.
In addition, although the macroeconomic environment in some stages is still bad, all commodity resources will show a bull market based on the expectation of credit currency depreciation due to the excessive release of credit currency by central banks. However, compared with other commodity resources, the bull market of gold will be more obvious, and the bull market of other commodity resources will be relatively limited in strength and sustainability because of the lack of sustained good support from the macroeconomic environment. For example, after the financial crisis in 29-21, the central banks wantonly released the commodity market in the monetary phase. The bull market of gold was very strong, and the bull markets of commodity metals and crude oil lacked sustainability, which was mainly due to its lack of fundamental support for macroeconomic improvement.
therefore, based on the analysis of gold and silver attributes, combined with the current economic and financial environment, we think that the current bull market foundation of gold is much better than that of silver. Technically, it also reflects such corresponding characteristics, such as the weekly K-line diagram of gold and silver prices from 28 to now:
From the market operation of the band where the price of silver bottomed out at $8.42 in 28 financial crisis and peaked at $49.77 in 11 years, the two-thirds line of the resistance line 1 in this band and the semi-annual line of the weekly line became the supporting bottom line for the sharp adjustment of the price of silver in 211. And this 2/3 line seems to constitute a macro upward trend line formed after the silver price bottomed out at $8.42 in 28. This trend line has the same function as the H1 upward trend line in the weekly chart of gold price. That is to say, from the macro trend observation since 28, gold and silver still maintain the macro bull market pattern.
However, as far as the medium-term pattern is concerned, the gold price is still stable above the quarterly moving average of the weekly line, and the quarterly moving average of the silver price has become a strong back pressure for the rebound of the silver price in recent months. In December of 11, the lowest price of silver was near the semi-annual line of the weekly line, but the price of gold was absolutely supported in the quarterly line of the weekly line. It can be seen that in terms of the operation of the whole medium-term market, the bullish background of the gold market is obviously stronger than that of the silver market.
looking at the whole adjustment of the price of gold and silver after it peaked in 11 years, the figure shows that USD 49.77-26.4 is the whole adjustment band of the price of silver, and the resistance line 2 formed by this band, 2/3 of which constitutes a strong back pressure for the rebound of the price of silver in February. According to the theory of resistance line, if the 2/3 line does not break through effectively, it is not appropriate to hope for a bull market in silver. In addition, the downward trend line of H1 still firmly constitutes the back pressure of the mid-term rebound of silver price.
There is no doubt that the medium-term technical aspects of the gold market have improved a lot compared with the silver price. First, the medium-term downward trend line L formed after peaking at $1,92.8 in 11 years has been broken in the further sharp rebound of the gold price in February. Looking at the whole adjustment band from $192.8 to $1522.55, the 2/3 line of the resistance line formed by this band has been broken (not marked in the figure), that is, the medium-term technical improvement of the gold market is more obvious than that of the silver market. If there are medium-term opportunities in the market outlook, the author thinks that the gold market opportunities may be more stable and less risky than the silver market opportunities.
Therefore, the bull market foundation faced by the gold market is better than that of the silver market in terms of fundamentals and technical analysis!