Whether The Market Gold Price Soar Indicates The Opportunity To Buy Gold.

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The weave of the net will tell you whether the gold price soared or whether the central authorities could increase their reserves to buy gold again.

The persistent decline of gold has been a constant decline, but gold has been "climbing the peak" in recent years, which has stimulated investors' enthusiasm for "bargain buying".

What is the driving force for gold to rise? Is it time to buy gold again?

"The low price before the gold price stimulated the demand for physical gold to a certain extent.

Uncertainties caused by the geopolitical crisis and the slowdown in the global economy have increased the risk aversion demand of all countries, including the central bank's purchase of gold reserves, and the Swiss gold referendum may boost gold prices.

However, under the trend of a stronger dollar, the opportunity cost of investment in gold is larger. The continuous reduction of gold ETF may also be the reason for long-term gold bearish. "

Insiders told the first Financial Daily reporter.

Last Friday, the gold market surged 42.5 US dollars from a 1146 US dollar / ounce low at the beginning of the week, to 3.7% at 1188.5 US dollars / ounce.

As of press release, the gold price was $1185.53 / ounce.

All countries "mother" purchase gold hedge

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In the first place, the Central Bank of Russia used its central bank vault to enrich its long-term strength in the economic "seesaw war" with the west when gold prices fell.

Data released by the World Gold Association (WGC) show that Russia's gold purchases in the third quarter amounted to 55 tons, accounting for 59% of the total net purchases of the central bank.

So far this year, Russia has bought 115 tons of gold, more than the sum of the previous two years' purchases.

In addition to Russia, in the absence of many economic and geopolitical traumas, central banks have again sought asylum and dispersed reserve allocation to gold.

The report released by the world gold association shows that the global central bank has been a net buyer of gold for fifteenth consecutive quarters.

In the past 7 quarters, 6 quarters of the central bank's demand has reached about 100 tons, a notable growth since 2010.

There are signs that 2014 will be another year to enrich central banks with gold.

The world gold association also pointed out that, similar to the recent quarters, procurement mainly came from the CIS area.

Russia (55 tons), Kazakhstan (28 tons) and Azerbaijan (7 tons) continued to substantially increase their gold reserves.

The International Monetary Fund (IMF) revised its growth forecast in October, recognizing that the increasing downside risk is taking the lead. Increasing the allocation of gold assets will cushion the potential economic slowdown.

However, insiders told our reporter: "the central bank purchases more money for the purpose of diversifying international foreign exchange reserves and hedging the risk of uncertainty, but for investors, it may not be the time to buy gold.

As the Fed's interest rate increases are expected to rise, the rising US dollar will inevitably pressure the risk assets such as gold and bonds, so the opportunity cost of the current gold purchase investment is higher.

Swiss referendum or gold rally

In November 30th, Switzerland will hold a referendum on matters related to gold, which will also have a certain impact on the long-term trend of gold prices.

In the Swiss referendum, Swiss citizens will decide whether to ask the SNB to increase its gold reserve to 20%, whether it wants its central bank to stop selling gold and store all its gold in the country.

If the Swiss referendum is passed, the amount of gold that Switzerland will buy may be 1500~1800 tons, which will be completed in the next 5 years, equivalent to 7%~10% of the annual gold output.

According to the Bank of Holland, if the Swiss referendum is approved, it will probably reverse the weakness of gold and push gold up by 17%.

Deutsche Bank said the latest polls showed that the number of gold referendums approved by Switzerland was clearly dominant.

However, Nomura analysts believe that even if the referendum is passed, the next situation will be relatively dull. The central bank has two years to complete the recovery of the gold reserve.

At present, 20% of the gold held by the SNB is stored in the Bank of England and 10% in the Bank of Canada.

Nomura analysts also put forward another possibility, that is, the reduction of the SNB.

Reserve, so that only a small amount of gold can be purchased to meet the requirements of gold reserves of 20%.

However, this will cause the appreciation of the Swiss franc and damage the country's economic growth.