In late September, Ebbell, who has been a loyal fan of gold for a long time, suddenly publicly expressed pessimism. The head of Tiberius Group, one of the most famous commodity hedge funds in Europe, believes that if there is no hedging function, the price of gold will fall below $65,438+$0,000 per ounce.
In the past week, while the global bond market, stock market and commodities have been "diving", the once "safe haven" gold has also experienced an amazing decline.
The collapse of the bond market has caused financial predators such as highly leveraged hedge funds and investment banks to suddenly encounter liquidity shortages. After selling the most liquid stocks and commodities, gold, which has been in a super bull market, has also been sold, and the precious metal market has a rare positive correlation with other assets.
"This downward spiral of deleveraging also occurred before the financial tsunami in 2008." Fu Peng (blog, Weibo), chief macroeconomic adviser of galaxy futures, said that Standard Bank of South Africa recently raised its forecast on the possibility of economic recession.
A "paradise" on fire
When Ebbell expressed the above views, the gold price of LME in London had just adjusted from an all-time high of 1.920 to around 1.800. As the only "safe haven" after the fire of various assets in the world, the price of gold has increased by more than 50% this year, and global analysts have higher expectations for this rare precious metal bull market for decades.
However, on September 23rd, the main contract of the New York Mercantile Exchange gold futures plunged 1.0 1.9 USD/oz, closing at 1.639.8 USD/oz, the biggest one-day drop in the past five years. Prior to this, on September 22nd, London LME nickel futures plunged 17.47% overnight, and Chicago commodity futures also plunged. Domestic Shanghai copper, Shanghai lead, rubber and soybean oil also fell in intraday trading. The decline of precious metals continued to soar. In the past two weeks, new york gold futures have fallen by more than 14%, while London silver prices have shrunk by more than 36%. Despite the escort of daily limit and margin increase, gold futures in China market still fell by 7% in the past two weeks, and even fell to the limit on September 26th.
Baatar, chief technical analyst of Bank of America Merrill Lynch, said that hedge funds have recently carried out a rare large-scale selling in the precious metals market.
In most cases, the price of precious metals is negatively correlated with the trend of other assets, but recently the situation has reversed. Precious metals plunged from the super bull market and began to be positively correlated with the prices of other assets, which is a dangerous signal for many analysts. "This is a signal of the loss of microcirculation liquidity in the financial market." Fu Peng said, "In recent trading days, investment banks and hedge funds have been forced to start selling" life-saving "assets such as gold, indicating that the last line of defense in the financial market may have been broken and another crisis may be imminent."
Recently, the European debt crisis has further deteriorated. The yield of national debt of "European pig" countries such as Greece set a historical record, and the price of national debt showed a geometric decline. "European and American financial markets still use higher leverage, combined with more possible derivatives, which means that their loss estimates may exceed the general expectations of the market." Fu Peng believes that "on the other hand, with the rapid decline of European stock markets, the share prices of major banks with mortgage financing are also falling rapidly, which means that their total assets are shrinking rapidly; In this context, funds that routinely provide short-term liquidity to the banking system began to close short-term financing channels or lending channels to European banks on a large scale, which aggravated the liquidity shortage of European banks and their hedge funds. " "Compared with six months ago, the liquidity pressure in London and Wall Street is greater now." James Zhang, a commodity analyst at Standard Bank of South Africa, told this newspaper that "the recent selling of stocks, commodities and precious metals in the market is mostly due to the institutional demand for cash."
At the same time as the stock market plummeted, various varieties in the commodity market also experienced large-scale diving. Since late September, metals, agricultural products, etc. In the international and domestic markets, it has been black continuously, with many varieties falling by more than 5% every day, and copper even falling by 16% in three trading days.
According to CFTC statistics, hedge funds and other institutions are currently frantically lightening their positions. In this wave of position changes, hedge funds significantly reduced their holdings of metal copper bulls by 9 1%.
James observed in the London market that both long-term investors and short-term investors are facing financial pressure, and the shortage of liquidity further increases the volatility of the market, which in turn makes many well-funded institutions adopt cash strategies, thus forming a vicious circle of liquidity and volatility.
Possibility of recession
The strange trend of precious metals reminds many people of the months before the 2008 financial tsunami.
After reaching the historical high of 1 1,000 USD at that time, gold began to be sold in June and July 2008, and its price plummeted.
"In the case that the sale of gold failed to solve the liquidity deficit, banks began to go bankrupt in September 2008, and the financial tsunami officially began." Fu Peng said that the spiral decline of various assets in financial markets is very similar to that in 2008.
"When the positions of European and American stocks and commodities are sold off, the selling tide triggered by this' toxic' spiral structure will inevitably spread to Asia or emerging economies." Fu Peng said that the recent withdrawal of Blackstone's investment in real estate projects in China, the selling of H shares of China Ping An (60 13 18) in Hong Kong and the sharp depreciation of currencies in emerging Asian economies all confirmed the seriousness of the incident. "This process of selling assets will continue until the liquidity of financial markets returns to normal." Fu Peng said that the lack of micro-circulation liquidity in the financial market will lead to the lack of liquidity in the real economy.
"All kinds of economic data and financial turmoil mean that the resistance to economic growth has increased and there is a great possibility of falling into recession." James thinks. Standard Bank of South Africa had previously predicted that the possibility of economic recession in Europe and America was 50%, and recently raised this ratio again.
However, James also pointed out that although the recent performance of precious metals is similar to that in 2008, the market has been fundamentally different from that at that time. "The leverage ratio has decreased, and central banks have also established security protection systems to provide emergency support for liquidity. A large-scale credit crisis is unlikely, but the possibility of a small-scale crisis is not ruled out. "
Standard Bank of South Africa believes that under the current situation, Europe and the United States will gradually push for easing policies. "Even if the euro zone does not cut interest rates in June 5438+00, it will fall in June 5438+0 10, and the US inflation expectation will also drop sharply. Once there are signs of deflation, QE3 will be staged immediately. " James thinks. "Such a round of shocks will force the liquidity of the financial market out and eventually return it to the real economy. The financial attributes of commodities, precious metals and other assets will gradually be washed away and find their own value again. " Fu Peng thinks.