[Fortune in the Year of the Rat] Experts of the Year of the Rat, optimistic about the consolidation of the gold price, and then break through the 1600 mark

Thematic interviews

Written by: Jingjing He

2020-01-25 11:00

The year of the pig is over, the year of the rat is coming, and the traditional wisdom of investing in gold for value preservation and anti-risk is again favored this year. Both interviewed experts estimate that the price of gold will return this year.

Xu Zhijie, a gold strategist in the Asia Pacific region of State Street Global Investment Management's SPDR ETF business, said that the gold price performed well last year, rising by 18%. From a technical analysis point of view, the relative strength index (RSI) had previously worn 80 and was "overbought", but the price of gold has retreated from the high level at the beginning of the year by about $ 80, and the RSI has returned to 50. I believe that after consolidation, the price of gold is strong And then on.

Xu Zhijie: Investors continue to buy gold to hedge risks

Xu Zhijie pointed out that the current low-interest environment is mainly supported by gold prices, and all central banks are cutting interest rates. The market estimates that the Fed will cut interest rates by 67% this year. In a low interest rate environment, many bonds are in negative yield, and this year the dollar is expected to weaken, making the role of hedging and hedging of gold prices more apparent. He believes that although China and the United States have reached the first phase of the trade agreement, it remains to be seen whether it is really enforceable and the subsequent negotiations. Global geopolitical risks have also increased, and global stocks are at a high level, which has led many investors to continue to buy gold. In order to hedge various risk factors or make the stock market pull back.

He added that recently, many investors have seen buying gold, especially through futures and ETFs. I believe that after the new year, the price of gold can break through the $ 1,600 per ounce mark, and the three-month target price is in the range of $ 1,600 to $ 1,700. The price of the whole year is more difficult to say because there are too many factors affecting the price of gold. For example, if the Wuhan epidemic further erupts after the new year, the stock market will adjust and the price of gold will be further pushed up.

Xu Zhijie believes that the further outbreak in Wuhan will cause the stock market to adjust and further push up the price of gold. (Profile picture)

Lu Churen: Intensified inflation is favorable for gold prices

Lu Churen, an independent foreign exchange commodity analyst, also believes that gold prices have a great opportunity to rise this year. Generally speaking, because gold is priced in US dollars, if the US dollar is strong, the price of gold will be relatively pressured. However, Lu Churen pointed out that even in the past one or two years, even if US stocks and the US dollar rose, the price of gold continued to rise, and we can see that the market is highly sought after for the risk aversion ability of gold prices. In the short term, new risk events, such as the Wuhan epidemic, are believed to trigger more capital hedging, which will help push up the price of gold.

In the medium and long term, global commodity prices have continued to rise, inflation has intensified everywhere, and stagnation has even occurred in some places. Under this market condition, gold can not only hedge, but also maintain value, and is expected to continue to be sought after. This year, it can regain more than $ 1,600 per ounce, and the main psychological barriers to rise again are $ 1,650 and 1,700.

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