Gold prices in August showed a “v” pattern
As of the 23rd, the price of precious metal gold in August fell first and then rose, showing a “v” pattern. According to the Commodity Market Analysis System of Business Society, the spot market price of gold on August 23, 2023 was 458.28 yuan/gram, an increase of 0.28% compared to the spot market price of gold at the beginning of this month (August 1), which was 457 yuan/gram.
Silver Price
According to the Commodity Market Analysis System of the Business Society, the average silver market price on August 23, 2023 was 5713.67 yuan/kg, an increase of 2.43% compared to Monday’s 5578 yuan/kg, and a decrease of 0.94% compared to the average silver market price of 5816 yuan/kg at the beginning of this month (August 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.
Logical sorting of precious metal fundamentals
The Federal Reserve is still in a tightening cycle of policies, and there is still uncertainty about when to end interest rate hikes. The high interest rate hike in the United States has a restraining effect on interest free asset precious metals. However, the market holds a loose expectation for the Fed’s subsequent policies, which to some extent alleviates the pressure on precious metal prices.
At the same time, the release of gold demand has raised the price of precious metals. On the one hand, it is based on geopolitical tensions, and on the other hand, it is also a concern about macroeconomic uncertainty. The physical demand in the post pandemic era, coupled with the continuous monetary demand for central banks to purchase gold globally.
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.
Silver experienced a significant decline in early August, and the recent strong rebound in silver prices is expected to be stronger than gold in the short term.
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