The price of gold has exceeded 600 yuan per gram! Will it continue to rise?
In September, international spot gold prices fell slightly, while domestic gold retail prices continued to rise. The selling price of gold in multiple gold stores has risen from 592 yuan per gram in early May to around 600 yuan per gram, and the retail price of gold from brands such as Chow Tai Sang has reached 601 yuan per gram.
Although the price is at a high level, consumer enthusiasm for purchasing gold remains undiminished. "At 590 yuan per gram, I wanted to wait and see. Now that it has risen to 600 yuan, I have to buy it." Ms. Li, born in the 1990s, said to Guoshi Express.
What factors have affected the continuous increase in the retail price of gold? Is it a good time to buy gold now as young people flock into the gold buying army?
Why does the price of gold remain high?
For a period of time, the international gold price has shown a fluctuating trend, falling from a high of $2081.82 per ounce in early May to $1919 per ounce.
In response to this trend, Wan Zhe, a researcher from the the Belt and Road Institute of Beijing Normal University and former chief economist of China Gold Group, said in an interview with China News Service that, due to the uncertainty of the prospect of the Federal Reserve's interest rate increase and international geopolitical conflicts, there is still momentum to hold gold prices at a high level.
"Overall, the international gold price is still at a historical high," said Wan Zhe. However, whether from the marginal effects of risk aversion or US economic data, it can be found that the motivation for international gold to further climb is not very strong.
At the same time, under the relatively stable fluctuations in international gold prices, both the price and market of domestic gold seem to be more hot.
"The main reason for this may be related to the current choice of investment product direction." Wan Zhe said that investment channels such as real estate and stock market do not seem to be as active at present. In terms of asset allocation, the public will be more inclined towards safe haven assets rather than risk assets. Among safe haven assets, gold is the most familiar, beloved, and easily accessible product for the public.
Young people flock to the gold market
Accumulate gold beans, buy gold bars, and pair with gold bracelets. On social media, more and more young people are flocking to the gold buying army, sharing their gold buying experiences.
In Wan Zhe's view, this is a manifestation of the trend towards younger investment.
"At present, the young consumer group has a more investment and financial concept than people in the past when facing their savings, so they will enter the investment market earlier." Wan Zhe said that as one of the investment markets, the gold market naturally generates a phenomenon of young people buying gold.
In addition, the innovation and design of physical gold and gold jewelry categories have also become a key factor in attracting young people.
"The traditional impression of gold jewelry is outdated. Nowadays, more and more businesses are paying attention to developing a segmented market for young people. The design concepts and reputation of some domestic brands are on the rise, attracting this group of people who love jewelry to consume." Wan Zhe pointed out that young people also purchase gold with a mentality of balancing consumption and investment.
Recently, the World Gold Council, along with eight retail brands including Caibai Jewelry and Chaohongji, launched an innovative category of "hard foot gold". Wang Lixin, CEO of the World Gold Council in China, said that more and more young people are now fond of and wearing "hard foot gold" jewelry on a daily basis, which fully reflects their strong pursuit and expression of the dual attributes of fashion and spirit.
How will gold prices move within the year?
"Tomorrow, the US CPI data will become a focus of attention," Wan Zhe said. "The second half of this year is a relatively important moment for the world economy, and we will see where the turning point of the entire economy will appear.". At that time, of course, it will have a very direct impact on the price of gold.
Wan Zhe believes that gold prices will fluctuate in the second half of the year until clearer signals emerge from the Federal Reserve's interest rate policy or geopolitical conflicts, and gold prices may decline.
Li Yuefeng, a researcher at the Beijing Gold Economic Development Research Center, also believes that overall, it is expected that international gold prices will remain volatile until the results of the September Federal Reserve's interest rate meeting are released, with limited room for upward momentum. The August CPI of the United States, announced on September 13th, will become the focus of market attention. Stronger than expected data may attract hawkish bets from the Federal Reserve and put pressure on international gold prices, while weak data will help push international gold prices upwards.
Carly Garner, co-founder of Decalli Trading Company, believes that international gold prices are still above key support levels, and if the upward momentum of the US dollar index weakens, international gold prices may reach historic highs.
In addition, Ghana added that the gold market may still fluctuate in the short term, and international gold prices may retest support levels around $1900 per ounce. If the international gold price drops to $1880 per ounce, it is also considered a normal fluctuation.
