As the Palestinian-Israeli situation continues to ferment, driven by risk aversion, gold has become the "brightest star" in recent financial markets.

the international gold price rose by more than 8% in two weeks, and the quotations of domestic gold jewelry also rose, standing at 615 yuan/gram. Will this upward trend continue?

The price of gold rose by more than 8% in two weeks

On October 24th, the international price of gold remained at around US$ 1,988. From October 7th, when the conflict broke out between Israel and Hamas, the international price of gold rose by more than 8% in two weeks. Last Friday, the New York Mercantile Exchange's December gold futures price once exceeded $2, in intraday trading, indicating that the demand for safe haven is rising.

in the same period, the futures price of crude oil, which is also a safe-haven commodity, also rose after the escalation of the Palestinian-Israeli conflict, but it is still lower than the price of gold in terms of weekly increase. WTI crude oil has increased by about 6.4% in two weeks and has not yet reached the height at the end of September. Previously, the closing price of Brent crude oil futures at the end of September once rose to $95/barrel, the highest point in 1 months.

Looking back at the trend of gold this year, the process is actually quite tortuous. In the first half of this year, driven by the risk aversion caused by various factors such as bank bankruptcy in the United States and interest rate hike by the Federal Reserve, the international gold price went up all the way. At the beginning of May, it once reached $2,85 per ounce, setting a record high. However, since then, the international gold price has turned down. From September 25 to October 5, the international gold price once experienced a nine-day losing streak and fell to a low of nearly seven months. With the outbreak of the Palestinian-Israeli situation, the international gold price began to turn around again.

In terms of domestic gold futures, after the National Day, the main December contract rose by 3.5% from October 9 to October 2, and the settlement price on the 23rd was 476.58 yuan/gram. Although the absolute increase was slightly lower than that in the international market, the domestic RMB-denominated gold price has reached a record high since its listing. In the spot gold market, the gold quotations of many well-known gold jewelry brands such as Chow Tai Fook, Lao Fengxiang and Zhou Shengsheng have also gone up, and the foreign gold quotations have stood at 615 yuan/gram.

in the domestic gold ETF market, in terms of net inflow of funds, gold ETFs have received continuous net inflow of funds in the past six days, with a maximum net inflow of 78.274 million yuan in a single day, with a total "gold absorption" of 173 million yuan and an average daily net inflow of 28.7761 million yuan. It is worth noting that recently, the first batch of domestic gold stock ETFs-CSI Shanghai-Shenzhen-Hong Kong gold industry stock ETFs were officially approved, and Huaxia Fund and Yongying Fund took the lead. The newly approved stock ETF is a stock index product, which is more flexible than gold investment. It invests in listed companies in the gold industry chain, mainly gold mining companies and gold jewelry retailers.

can the follow-up reach a new high?

will the upward trend of gold prices continue?

From the curve of new york gold futures price, the future gold price will remain very strong. Judging from the monthly contracts of major futures, the difference between the contracts in December, February, April and June is basically 2 dollars, which indicates that the gold trading price will be higher with the passage of time.

It is worth mentioning that, in the two weeks since the outbreak of this round of Palestinian-Israeli situation, the price of gold and the interest rate of long-term US debt have been "neck and neck". Last week, the yield of 3-year US Treasury bonds closed at 5.87%, up 31 basis points in the week, while the yield of 1-year US Treasury bonds was reported at 4.924%, up 29.6 basis points in the week, the biggest weekly increase since April 8.

In the past, the interest rate of long-term US bonds was often the "natural enemy" of the gold price. In the last two weeks, the gold price and the interest rate of long-term US bonds have been decoupled and go hand in hand. What does it mean?

Xie Honghe, an analyst in Zhongtai Securities, said that in history, the general hedging transactions tend to be pulsed. Gold has commodity attributes, hedging attributes and financial attributes determined by the real yield of US debt. Among them, hedging attributes affect the rhythm of gold price, which is driven by events such as geopolitical situation, international relations and liquidity risk, which leads to the warming of market risk aversion, which in turn leads to the rise of gold price.

Xie Honghe believes that this time, unlike ordinary risk events, the gold market is very sensitive to the geopolitical situation in the Middle East in an environment of high inflation in the United States. Taking history as a mirror, the essence is that the market is worried that the American economy will eventually fall into stagflation. If the geopolitical situation in the Middle East expands and oil prices continue to rise sharply, the risk of stagflation in the United States will increase. If the conflict does not further expand, the oil price does not continue to rise rapidly, and the short-term impulse risk aversion will fade, the market is expected to return to the previous main line.

According to the research report released by CITIC Jiantou, the situation between Palestine and Israel has escalated, and compared with the 1973 oil crisis, it is predicted that the fundamentals of the crude oil market will still be in short supply in the next six months, and WTI oil prices may show an upward trend, with a target price of $1 at the end of the year; The Fed's interest rate hike came to an end, and gold entered a reverse upward trend, with a target price of $2,-2,2 at the end of the year.

Fan Zhen, an analyst in haitong futures, believes that the domestic gold price is affected by the expected weakening of RMB exchange rate, which deviates from the international gold price to some extent. It is difficult for the spread between China and the United States to fall in the short term, and the expected weakening of RMB still exists, which supports the domestic gold price. Since the beginning of this year, the price of Shanghai gold denominated in RMB has diverged from the price of COMEX futures denominated in US dollars and the price trend of spot gold in London to some extent. Especially since April this year, the international gold price has dropped, while the domestic gold price has maintained an upward trend.

Central banks continue to buy gold

On October 7, the data released by the State Administration of Foreign Exchange showed that by the end of September 223, the gold reserve of the Bank of China was 7.46 million ounces (about 2,191.55 tons), an increase of 84, ounces (about 26.12 tons) from the previous month. It is worth mentioning that this is the eleventh consecutive month that the central bank has increased its holdings of gold, with a cumulative increase of 7.82 million ounces.

In the first seven months of this year, the Bank of China increased its holdings of gold by about 126 tons, making it the largest gold buyer in the world. At the same time, global central banks collectively set off a "gold rush" tide. According to the latest report of the World Gold Council, central banks bought 77 tons of gold in August, an increase of 38% from July. In the past three months, the total amount of gold purchased by central banks reached 219 tons. In the first half of 223, the demand for gold purchases by global central banks reached a record 387 tons.

State Street Global Consulting, the world's fourth largest asset management company, said, "We expect central banks to continue to play the role of net buyers of gold." As countries seek to get rid of the "excessive concentration" of dollar reserves, this trend of central banks buying gold should continue. In addition to the diversification of reserves, this trend is also driven by the central bank's desire to strengthen its balance sheet and increase liquidity without increasing credit risk.

regarding the long-term trend of gold price, Xie Honghe believes that the real yield of the current 1-year US debt is about 2.5%, which is in the high range of the past decade. Assuming that variables such as the rise of inflation center in the United States and the purchase of gold by global central banks remain stable, the decline in the real yield of US debt in the future is the core variable driving the price of gold to rise further. The quantitative calculation results show that if the actual rate of return falls from the current 2.5% to % of the center in the past decade, the corresponding target gold price will be around $2,8 per ounce, and the key companies in the sector will also have greater investment opportunities.