Author丨Chen Zhi.
Editor丨Zeng Fang.
Source丨ic
As of 18:00 on December 26, the London spot *** hovered at 2061$88 ounces, up more than $12 from $1,823 ounces** at the beginning of the year5%, which is on track for its best annual performance since 2020.
Behind this, the rise in the number of rises since the beginning of this year is closely related to the escalation of international geopolitical risks and the violent turmoil in the financial market.
From March to May, ** briefly broke through $2,000 an ounce and hit an all-time high of $2,071 an ounce, an important factor was the sudden increase in systemic risk of small and medium-sized U.S. banks due to the run and bankruptcy of Silicon Valley Bank at that time.
Since October, it has once again risen sharply from $1,810 an ounce to around $2,060 an ounce, which is closely related to the sudden escalation of the Palestinian-Israeli conflict.
This seems to once again confirm an unwritten investment rule in the financial market - buy in troubled times. A person in charge of emerging markets told reporters. Affected by factors such as the escalation of international geopolitical risks and the increasing volatility of the financial market, more and more asset management institutions and family offices have increased their positions in ** assets since the beginning of this year, becoming an important driving force behind the promotion of gold prices to new highs.
The reporter learned that at the end of last year, the proportion of many asset management institutions and family offices was still less than 10%, but at present, their holdings have basically reached 13%-15%, and some family offices have even invested 20% of their assets in ** assets.
In the opinion of many industry insiders, the future is still expected to continue. Behind this, in addition to international geopolitical risks that are still fermenting and may trigger new black swan events, another important reason is that the Federal Reserve will pull the trigger for interest rate cuts next year. This move will have two major impacts on gold prices, one is that the Federal Reserve's interest rate cut will make the dollar index more likely to fall, resulting in a corresponding increase in US dollar denominations;Second, the Fed's interest rate cut may bring U.S. real interest rates lower, boosting valuations.
More importantly, in the case of international geopolitical risks, the hedging attribute of ** is increasingly valued by various investment institutions. The head of emerging markets said bluntly. Nowadays, many asset management institutions and family offices have once again regarded ** as an important strategic allocation asset as an important hedging tool to hedge the risk of black swan events.
**Risk aversion is once again being emphasized
Since the outbreak of the Russia-Ukraine conflict last year, the market has shown an increasingly obvious trend, that is, as long as international geopolitical risks suddenly escalate or there are huge risks in the financial market, **will usher in a **rise**.
Since last year, there have been three significant surges, all of which are related to this. A private equity macroeconomist told reporters that the outbreak of the Russia-Ukraine conflict last year, the failure of the Silicon Valley Bank run in March this year triggered the collapse of small and medium-sized banks in the United States, and the sudden escalation of the Palestinian-Israeli conflict in October.
Behind this,First, the hedging attribute and trend independence of the first market have made many investment institutions rush into the market to hedge as soon as they see the sudden risk comingSecond, affected by the Fed's continuous interest rate hikes, the asset preservation function of U.S. Treasury bonds has weakened significantly, making the popularity of the U.S. Treasury "go to a higher level".
The reporter learned that due to the impact of the Federal Reserve's continued sharp interest rate hikes, the US Treasury bonds continued to fall (and the US bond yields rose accordingly), and more and more investment institutions realized that holding US bonds to hedge against risk would face greater asset valuation, and turned to adopt the strategy of "abandoning US bonds and investing in them".
The above-mentioned emerging market manager told reporters that the largest capital force currently buying up is mainly asset management institutions and family offices. Because they are all aware that the world has entered an "eventful autumn" - international geopolitical risks have become one after another, and they have increased their positions in ** assets to achieve better asset preservation.
At the end of last year, many family offices still accounted for 7%-10% of their positions, but at the end of this year, this value generally reached 11%-15%, and even some family offices have invested more than 20% of their assets in. He told reporters that even though the U.S. stock market has hit a new high this year, this has not affected the enthusiasm of family offices to continue to increase their positions, indicating that more and more family offices pay more attention to the preservation and security of assets than investment returns.
In the past, they mainly focused on **US dollar-denominated **ETFs, and now they are diversifying **ETF products denominated in different currencies on the one hand, and trying to buy ** shares and ** long positions on the other hand, so as to diversify the investment risk of ** assets and achieve better asset preservation and appreciation effects.
Global central bank gold purchases continue to "support the bottom".
It is worth noting that many investment institutions have also attributed the high to a new high this year on the enthusiastic gold purchases of global central banks.
Previously, the third quarter "Global ** Demand Trend Report" released by the World ** Association showed that in the third quarter of this year, global central banks bought **337 tons, setting the third highest quarterly net gold purchase in history. Although this data failed to break the record for global central bank purchases in the third quarter of 2022, it helped to reach 800t in the first nine months of this year, the latest record since the data was collected.
However, the above-mentioned emerging market manager bluntly told reporters that the increase in holdings by global central banks plays more of a role in "gold price support", which may not help gold prices to rise. After all, central banks have their own gold buying rhythms and strategies, which can not only not have a significant impact on market fluctuations, but also increase their holdings at the appropriate level.
Wang Lixin, CEO of the World Association in China, pointed out in an interview with this reporter that the global central bank will not pay attention to the short-term return of investment, but from the perspective of strategic asset allocation, evaluate the role of foreign exchange reserve investment risk prevention and asset preservation in the future global macro political and economic environment.
An Kai, head of global research at the World Association, also told reporters that the investment strategy of global central banks is mainly based on long-term holding. At present, the reason why they continue to increase their positions in ** reserves is mainly due to three reasons, one is that they have high hedging attributes and asset security;Second, it has always been a highly liquid asset, and has now become the second most liquid asset in the world after the S&P 500 indexThird, the long-term average return on investment is quite impressive, and the annualized average rate of return on investment has exceeded 7% over the past 50 years.
The reporter learned that although the global central bank gold purchase behavior may not be able to promote the gold price to rise, it plays a role in supporting the gold price, and also attracts all kinds of capital to increase the position of ** assets, because the global central bank gold purchase behavior has reduced the probability of gold prices significantly.
Aakash Doshi, head of commodity research for the Americas at Citigroup, said that the central bank buying behavior of many countries is the key reason why the gold has remained strong since last year, and this move has raised the structural lower bound.
The reporter learned that with the gold price hitting a new high, whether the future consumer market can "support" such a high gold price is becoming the focus of controversy in the market.
James Steel, an analyst at HSBC, pointed out that the current record high may depress the purchase speed of physical goods, not only the gold purchase speed of many central banks may slow down, but also the enthusiasm of some consumers to buy gold jewelry and gold bars will also be affected.
In contrast, financial investment institutions are still optimistic about the trend next year.
JPMorgan Chase**, a series of Fed rate cuts between the second half of 2024 and the first half of 2025 will bring the Fed to $2,300 an ounce.
Jeff Kleeman, manager of Granite Shares**, said that the current sharp weakening of the US dollar and the sharp retreat in US Treasury yields are also contributing to the rally in gold prices. In addition, the Fed's interest rate cut expectations will rise next year, the Russia-Ukraine conflict continues to escalate with the Palestinian-Israeli conflict, and the ballooning debt scale in the United States may support *** further**.
Considering that next year is the year of major economies such as the United States, in view of the uncertainty of the political trend, more and more investment institutions will further increase their positions in ** assets to cope with black swan events. The aforementioned emerging market manager said bluntly.
sfc
Editor: Liu Xueying, intern: Tan Yahan.
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