This year is a year of witnessing various histories. The sudden global COVID-19 epidemic disrupted the original rhythm of financial markets. Plunging, circuit breaker, and negative values ??once became hot search keywords in the financial market.
On April 20, U.S. May crude oil futures fell to an unprecedented negative value, shocking the entire financial market. In addition, gold’s TD premium is also expanding into the negative zone. On April 7, the TD premium of gold once hit -20.26 yuan, setting a historical record.
The gold TD premium refers to the difference between the gold TD price and the account gold price. For example, on July 31, the current gold TD price is 425.75 yuan/gram, and the account gold price is 442.39 yuan/gram. Then, the gold TD premium is -16.64 yuan. Under normal circumstances, the price difference between the two is within plus or minus 4 yuan. Whenever the spread deviation rate is too large, the market will slowly return to near the equilibrium value. However, the volatility of the gold TD premium has been huge this year, and even if it recovered briefly, the price gap has widened again since then. In fact, before the gold TD premium fluctuated downward, the premium once surged upward. On March 16, the gold TD premium rose to 16.20 yuan, also setting a new record.
As for the causes of the gold TD premium, it is mainly divided into the following points:
1. Exchange rate
Account is a market-making mechanism. Banks provide investors with Provide buying and selling prices and accept investors' buying and selling requests based on the prices provided. The account gold price is the benchmark international gold price, and the international gold quotation is US dollars/ounce. The account gold is directly converted into RMB/gram on the basis of US dollars/ounce. TD is a free quotation with price priority and time priority. The transaction method of matching transactions is quoted in "RMB/gram".
When the U.S. dollar exchange rate fluctuates greatly, the price conversion between the two can easily widen the price difference. On March 20, after the U.S. dollar index hit a new high of 102.99 since January 2017, it began a deep downward trend. At the same time, the TD premium of gold has gone out of the oscillation downward trend, that is, it has continued to expand in the negative area. The depreciation of the US dollar corresponds to the appreciation of the RMB, which weakens the demand for value preservation and appreciation of gold TD quoted in RMB, resulting in a reduction in premiums.
Second, demand
In April, in the European and American physical gold markets, the price of physical gold exceeded US$1,800 per ounce earlier than the price of spot gold. As investors snap up gold bars and coins, they are even willing to pay an additional premium of more than 10%. However, physical gold in Europe and the United States is still out of stock across the board. At that time, the overseas COVID-19 epidemic broke out rapidly, external stock markets plummeted, and the economic outlook was very uncertain. Many central banks have introduced ultra-loose policies to stimulate the economy. As real interest rates in Europe and the United States fall, physical gold is in short supply, stimulating a rise in the price of gold priced in U.S. dollars.
However, the latest data from the China Gold Association shows that in the first half of this year, national gold consumption was 323.29 tons, a decrease of 38.25% compared with the same period in 2019. Compared with Europe and the United States, my country's epidemic blockade measures were lifted earlier and the resumption of work and production was carried out in an orderly manner, which promoted the gradual recovery of our country's economy and also promoted the reversal of the decline in the A-share market. In particular, the Shanghai Composite Index returned to the 3,000-point mark, awakening the long-dormant bull market in investors' minds. Therefore, domestic funds also tend to flow to the A-share market, weakening the appeal of RMB-denominated gold TD. The demand for gold in the European, American and domestic markets is different, resulting in different gold prices in different regions.
According to the law of spread fluctuations, extreme premiums will eventually return to the equilibrium value. On April 7, after the gold TD premium fell to -20.26 yuan, it fluctuated back to the equilibrium value area, and once rose above the positive value, reaching a maximum of 1.15 yuan, that is, the gold TD premium increased by 21.41 yuan. The current TD premium of gold is once again approaching the previous low, reaching a minimum of 19.62 yuan, and the premium may return to the equilibrium value at any time. In addition, gold prices are currently maintaining a comprehensive rise that breaks historical records, highlighting investors' growing concerns about the global economy. If U.S. real interest rates continue to fall, it will further boost gold prices.
In terms of funds, as of July 31, the current holdings of the SPDR Gold Trust Fund, the world's largest gold ETF, were 1,241.95 tons, setting new records continuously. Gold ETFs continue to attract capital inflows, which is one of the forces behind the continued rise in gold prices. It also means that gold prices still have room to rise. In addition, Goldman Sachs Group issued a bold warning yesterday that US policies are causing currency "devaluation concerns", which may end the dominance of the US dollar in global foreign exchange markets. Goldman Sachs also raised its 12-month gold price forecast to $2,300 an ounce from $2,000.
Therefore, investo related questions and answers: What is gold TD? At present, what is done internationally is spot gold, and the leverage is between 50-500. It is not that the bigger the leverage, the better, 100-200 is enough. The key is risk control. Basically, the MT4 software is used to do gold. Three aspects: 1. Fund management; 2. Technical analysis; 3. Mentality; among which mentality is the most important.
In fact, foreign exchange is not that complicated, it’s just that human psychology is too complicated. Foreign exchange is about probability. You can have a trading system with high probability and then execute it mechanically. The key is whether you can maintain consistency and resolute execution. Going on, every transaction is independent, and human psychology is always forgetting the past. This needs to be constantly tempered. When it can be executed mechanically, it will not be far from success.