Global Growth Rate Is Facing A Downward Trend. Gold Is Now Strategically Buying Opportunities.

Recently, the low price of gold has been in line with the pessimistic expectations of analysts. In anticipation of changes in gold prices, analysts also expect the fed to raise interest rates by the end of the year, while real interest rates will also rise before the end of the year. The factors driving the strong demand for physical gold ETF and spot gold in 2016 will remain intact, including the demand for physical gold as a strategic hedge.

Considering that the global growth rate is still facing great risk of downfall and the market may still worry about the ability of monetary policy to respond to economic growth factors, Goldman Sachs analysts believe that gold price plunging to below $1250 an ounce is a strategic buying opportunity.

As Goldman Sachs described, the price of gold fell sharply from $1350 an ounce to $1250 in the past month, especially after the Fed officials issued hawkish tough comments. technology The important horizontal line -- $1300 an ounce.

It is important that the sharp decline in gold prices has narrowed the divergence between real interest rates and gold prices, which were widened in July and August this year. In addition, the decline in the price of gold does not appear to be caused by the ETF settlement of physical gold, because ETF has increased in the past week. Based on this, some analysts expect that the US Commodity Futures Trading Commission report released on Friday will show a sharp reduction in net speculative short positions.

Because Gold price Goldman analysts have generally maintained a neutral attitude towards gold prices at the end of the year, while the expectation for the fed to raise interest rates by the end of the year is 65%, which is basically consistent with market expectations of 62%. The reaction of gold prices was greater than analysts had expected, making the expected risk of the gold price of $1280 an ounce lower at the end of the year.

Although Goldman Sachs interest rate analysis team still expects us Reality interest rate It will continue to rise to the end of the year, which will put downward pressure on the gold price. But the driving factors of strong demand for gold ETF and physical gold bullion in 2016 are still intact, including the demand for physical gold as a strategic hedge.

In addition to the strategic factors mentioned above, there is reason to believe that gold demand from China is likely to rise after the recent collapse in gold prices, especially from medium and long term asset investors. The demand for Chinese investors to buy physical gold has increased, and its potential drivers include resisting the depreciation of the renminbi, withdrawing capital from the real estate market and diversifying investment.

Finally, it is worth mentioning that gold prices have dropped to the same level as marginal cost of production in recent years.