Gold and silver plunge rapidly
Source: China Fund News
Reporter: Li Zhi, China Fund News
On August 13, spot gold surged then pulled back, with a sharp drop during the session, falling below $4,400 per ounce, down 0.74% on the day, latest quoted at $4,375.38 per ounce.
Spot silver fell about 1%, currently quoted at $64.668 per ounce.
In terms of news, the US July CPI dropped from 3.5% to 3.4%, and core CPI decreased from 2.6% to 2.5%, both in line with market expectations. The mild inflation data did not bring any major surprises, easing the pressure on the Federal Reserve to accelerate rate hikes. However, the lack of clear direction in the data led to a tug-of-war in the gold market between bullish and bearish forces. After the data release, gold prices initially fell then rose, but ultimately failed to hold the $4,400 mark.
According to a research report by CICC, two narratives that previously suppressed gold are being disproved: global liquidity has not truly entered a tightening cycle, and "de-dollarization" is not over. In Q2, net gold purchases by global central banks rebounded to 289 tons, up 62% year-on-year, indicating persistent concerns among global central banks about the US dollar.
Shenwan Futures pointed out that from a medium- to long-term perspective, the rise in global geopolitical risk, mounting US fiscal pressure, and the ongoing de-dollarization process are jointly supporting central banks' continued increase in gold reserves. Among them, the People's Bank of China has increased gold holdings for 20 consecutive months, highlighting the risk-hedging value of gold in uncertain environments.
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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