Events
Recently, the conflict between Russia and Ukraine has shown a trend of further deterioration. According to CNN reported on January 25 by China news network, the US government is considering further sending more US troops to Eastern Europe to strengthen its deterrence against Russia. So far, up to 8500 troops have been on high alert.
Comments
With the intensification of geographical conflicts, the gold sector rose against the trend. At the close on January 25, the Shanghai stock index closed at 3433.06 points, down 2.58% all over the world; The Shenzhen composite index closed at 13683.89 points, down 2.83% throughout the world. On the disk, only a few concept sectors such as gold rose. Among the individual stocks in the sector, Hunan Gold Corporation Limited(002155) and Western Region Gold Co.Ltd(601069) rose by the limit to close at 11.54 yuan and 13.03 yuan respectively, Shandong Humon Smelting Co.Ltd(002237) rose by 3.05% to close at 11.83 yuan; Zhongjin Gold Corp.Ltd(600489) rose 2.79% to close at 8.47 yuan; Chifeng Jilong Gold Mining Co.Ltd(600988) rose 2.61% to close at 15.72 yuan; Shandong Gold Mining Co.Ltd(600547) rose 2.54% to close at 20.17 yuan; Yintai Gold Co.Ltd(000975) rose 1.67% to close at 9.11 yuan.
Gold investment has obvious risk aversion, and the allocation value is prominent under the intensification of international contradictions. Gold tends to rise during the upward period of global systemic risk. According to the statistics of the international gold association, during September 11 in the United States, the S & P 500 index fell 7.99%, and the London gold is now up 7.69%; During the global financial crisis in 2008, the S & P 500 index fell 47.76%, and the London gold is now up 47.17%; In the process of brexit, the S & P 500 index fell 5.34% and the London gold is now up 4.94%. Affected by the escalation of the conflict between Russia and Ukraine, global stock markets fluctuated to a large extent, and the VIX rose 3.64% to close at 29.9 points. Against the backdrop of escalating geopolitical conflicts and rising global stock market volatility, gold prices are expected to rise.
Inflation and other issues continued to play out, and the upward momentum of gold increased. Judging from the current inflation rate, the year-on-year growth rate of CPI in the United States in December 2021 was as high as 7%, the highest in the United States in nearly 40 years. On the other hand, in the near future, the international crude oil price has continued to rise. As of January 24, 2022, the continuous settlement prices of Brent crude oil and WTI crude oil futures have closed at US $86.27/barrel and US $83.31/barrel respectively, about 10.9% and 10.8% higher than the level at the beginning of the year. Against the background of the rise in the prices of crude oil and other major commodities, the current inflation level is expected to continue to rise, Gold gained momentum.
Negative factors such as interest rate hikes were released in advance, and the resistance to the rise of gold gradually decreased. At present, the market generally expects the Federal Reserve to raise the current target interest rate in 2022. Looking back on the previous interest rate hike process of the Federal Reserve, gold prices have risen in the last two interest rate hikes. Therefore, the Fed’s interest rate hike will not necessarily have a substantial negative impact on gold prices. At the same time, the adjustment time of gold price has been nearly 18 months. Negative factors such as interest rate hike have been released in advance, market concerns have slowed down, and the resistance to the rise of gold price is gradually decreasing.
Investment advice
Under the background of intensified geographical conflicts, the hedging function of gold may continue to promote its price upward, and relevant production enterprises in the gold industry may benefit, such as: Zijin Mining Group Company Limited(601899) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) .
Risk tips
International geopolitical changes, abnormal fluctuations in commodity prices and changes in macroeconomic policies.
