Regarding the upward trend of precious metal prices this year, the reasons behind it may be analyzed from the following two aspects.
First of all, the global COVID-19 epidemic has not been completely controlled. At present, many countries are still in the state of closing cities, stopping production and working at home, which leads to negative results such as increased unemployment, reduced consumption and non-performance of debts, leading to world economic recession. Because the economic crisis has greatly increased the market demand for arbitrage, individuals and enterprises have a tendency to buy gold for arbitrage, which is a possible factor leading to the rise of gold prices.
Secondly, as the global market's psychological endurance to public health events has increased, the liquidity of the US dollar has been greatly released, the awareness of risk aversion has increased, the demand for the US dollar by investors has declined, and the US dollar has weakened recently. The dollar is the main pricing currency of gold, and the weakness of the dollar is another possible factor for the transfer of gold.
Institutions are generally optimistic about the medium and long-term trend of gold, but some analysts believe that after gaining a lot of profits, the price of gold may have a considerable correction in the short term. Cooper, an analyst at Standard Chartered Bank, said: "The current macro environment is very favorable for the price of gold, but in view of the recent sharp rise in the price of gold, the risk of short-term negative is rising."
In short, they are all bears. Whether to buy gold at this time is a matter of opinion.