Eighteen Third Plenary Session: Gold Price Or Benefit From Economic Reform

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P style= "text-align: left" > November 9th morning news, on Friday many analysts pointed out that the a href= http://fz.sjfzxm.com/, the eighteen Third Plenary Session of the Communist Party of China, which will start from the weekend, is considered to be the largest economic reform measure in 35 years, and many analysts expect that the price of gold will benefit from it.

Let's learn how these analysts arrive at this conclusion.

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< p > a href= "http://sjfzxm.com/news/index_cj.as" > gold price < /a > has dropped by more than 21% since 2013, compared with the historical peak in September 2011, there is a shortage of 31%.

Although precious metals are considered to be in a long-term bear market, some analysts have pointed out that healthy Asian market demand is a reason for optimism.

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Patrick Chovanec, chief strategist at P, said: "meaningful reform will be painful and disruptive, and I think many Chinese will seek gold security and profitability prospects." Patrick

"If China's real estate bubble burst, it will become more real," he said in an interview with CNBC.

For China, buying and hoarding vacant property actually has the same function as investment in gold, because they are all value preservation products without production value, so if the real estate market seems to have a big adjustment, many Chinese will turn to Huang Jin.

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< p > market participants pointed out that the progress of urbanization may be deepened in the third Plenary Session of the 18th CPC Central Committee. The reform of land ownership may be accompanied by the large-scale construction of social security housing. However, the introduction of property tax is also being discussed, hoping to reduce the possibility of any real estate market bubble.

Miranda Carr, head of Chinese research at bluestones capital in North Plaza, believes that "the introduction of property tax may make people less interested in investing in real estate, and gold will be an obvious alternative to Carr."

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"If China really controls property prices, gold's sales performance before the Chinese new year will show how successful this measure is," said Adrian Ash, director of BullionVault at BullionVault, the online gold exchange.

"China's attempt to cool the real estate market has never hurt the demand for gold in the past," he said.

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< p > traditionally used as a hedge against inflation, spot prices have risen steadily in the past five years in the economic crisis.

Gold prices have been further pushed up by the additional liquidity supply of central banks around the world and the accompanying worries about inflation.

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< p > this trend ended at the end of 2012.

The price of gold will no longer react fiercely to the Fed's decision statement. With the additional liquidity provided by the Fed, it will be more clearly defined by the "reduced" index, and the price of gold will continue to fall.

For many analysts, the cost of paper price, that is, the gold futures contract, is totally out of line with the actual spot price.

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< p > > a href= "http://sjfzxm.com/news/index_f.asp" > ETF Securities senior analyst < /a > Martin Arnold (Martin Arnold) is also one of the gold market observers who believe that gold demand in the Asian market will continue.

He said that households in Southeast Asia and India still consider precious metals to be the first choice to start building savings for rainy days. "We expect spot demand to remain strong. Chinese people's uncertainty about the future and their limited investment choices will lead to the support of gold, which is also a traditional wealth protection asset of Asian countries."

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< p > however, even if gold will become a good friend of Chinese people in the coming months, a bigger reform may still be a suppression of gold prices over the longer term.

The new reform measures may include the expansion and marketization of China's asset market, which means that the Chinese people will have more diversified investment options in the future.

Miranda Carle said, "if there is any doubt about China, people can pick up money to invest overseas instead of buying gold."

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< p > Adrian Ashe believes that China's financial industry is still highly underdeveloped. The control of pactions also makes gold and real estate become the best substitute for cash deposits, which can not even win inflation. "Although no one expects sudden liberalization of overseas investment, extensive regulation may give more choices to savers over time."

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