Gold prices rose first and then fell in October
The price of precious metal gold fell first and then rose in October. According to the Commodity Market Analysis System of Business Society, the spot market price of gold on October 24, 2023 was 473.42 yuan/gram, an increase of 2.27% compared to the spot market price of gold at the beginning of this month (October 1), which was 462.87 yuan/gram.
Silver prices fell by 0.89%
According to the Commodity Market Analysis System of the Business Society, the average silver market price on October 24, 2023 was 5815.33 yuan/kg, an increase of 0.86% compared to the average silver market price of 5766 yuan/kg at the beginning of this month (October 1).
Summary of Price Trends of Precious Metals and Crude Oil
In the early stage, the correlation between precious metals and crude oil trends is strong. After the second half of 2022, precious metal prices have bottomed out and stabilized, and the magnitude of macro factors affecting them has begun to show differentiation. The trend of precious metals and crude oil began to converge in late March, but after mid April, the trend began to diverge again. Mainly due to the increased impact of risk aversion on the rise of precious metal prices. Recently, crude oil prices have rebounded, and precious metal prices have also followed suit.
Comparison of precious metal gold and silver price trends in the past year
In 2022, the rise and fall trends of precious metal gold and silver have converged, but the decline in silver was deeper from April to August, and the recent recovery has been more significant. In December, silver continued its strong trend last month, and gold began to consolidate at high levels. In 2023, precious metal gold and silver have consolidated at high levels, with a slight decline in February. Since March, precious metal prices have started to rise. Silver prices began to decline in May, while gold remained relatively strong. In June, gold prices reached a high level and silver prices began to rise. After July, gold prices have become stronger.
Fundamental data
On October 23rd, the trading volume of gold on the Shanghai Stock Exchange was 12376 kilograms, a decrease of 15.18% compared to the previous trading day; The trading volume of silver was 734662 kilograms, an increase of 25.39% compared to the previous trading day;
The gold inventory of the previous exchange was 3222 kilograms, unchanged from the previous trading day. Silver inventory decreased by 53929 kilograms to 1027815 kilograms compared to the previous trading day.
The newly announced gold SPDR ETF position was 860.07 tons, a decrease of 3.17 tons from the previous trading day. The position of silver SLV ETF was 13822.13 tons, an increase of 78.38 tons compared to the previous trading day.
Hedge sentiment dominates the precious metal market
In October, precious metal prices were able to reverse the previous weak trend and show an upward trend, mainly supported by risk aversion sentiment. The escalation of the Israeli-Palestinian conflict has led to an upward trend in the VIX index, and the capital market has started trading in safe haven sentiment in the precious metal market. Although the inflation expectation premium has reached over 2.4% and the 10-year US Treasury bond interest rate is approaching the critical value of 5%, these influencing factors are weakening.
Future Market Forecast
At present, the price of precious metals has been fluctuating in the high range after hitting a 10-year high in the early stage. In the early stage, we expected that under the high inflation and high interest rate hikes, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world have increased their holdings of gold reserves, which has also provided some support for gold prices.
However, as market expectations for the Federal Reserve to maintain high interest rates for a long time continue to rise, the US dollar index has significantly risen, reducing the attractiveness of gold to investors. Previously, the market expected that the Federal Reserve would raise interest rates again within the year, but currently, based on the pricing of the federal funds rate, the probability of raising rates at the November and December interest rate meetings is still low. At the same time, the recent speech attitude of Federal Reserve officials has been relatively biased, and combined with current geopolitical factors, there is still ongoing tension. In the short term, it is expected that precious metal prices will continue to maintain a high level of sideways volatility.
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