Why does global foreign exchange start the golden age?

Why does global foreign exchange start the “golden age”?

Securities Times Network Mo Kaiwei Recently, domestic and foreign gold prices have risen sharply.

On Friday, the main COMEX gold futures contract reached a new high of 1415 since September 2013.

USD 4 / GBP with a weekly increase of 4.

29%; the main domestic Shanghai gold futures contract in 1912 also hit a new high of 316 over six years.

5 yuan / gram, weekly increase by 1.


  It was not surprising to see this news, it was all expected.

In fact, not only last week, since the beginning of this year, most countries around the world, especially emerging market countries, have been “buying” gold, and their gold reserves have increased.

As of the end of April this year, global official gold reserves totaled 34,023.

87 tons, the net net purchase of gold by nationals of countries around the world reached 207 tons, the highest level of net purchases gradually from 2010 by countries.

In particular, emerging markets continue to maintain a steady pace of accumulation of gold reserves for a long time, and Russia, China, Kazakhstan and India are still leading the way in terms of purchases this year.

  Some people may be puzzled, why is the net purchase of gold across borders soaring and the global gold futures index soaring?

The reason is actually very obvious.

Because the Fed ‘s June meeting on interest rates was temporarily set to not raise interest rates, it only warmed up for a rate cut and released a clear signal of rate cuts; and the US dollar and US Treasury yields fell together, and the loosening of monetary policy in many countries supportedThe growth of commodities and the expansion of global economic growth expectations have avoided the danger of a surge in gold as a result of dangerous assets.

Obviously, in the past 5 months, the trend of international trade tends to become more complicated and stimulated. The overlapping geographical deviations and conflicts have intensified, leading to the decline in the price of the dollar-denominated instrument, and the gold’s hedging function has become prominent. In particular, the Fed has indicated that it is planning to carry out more than tenThe first rate cut in 2015 also set off waves for the successive rise in gold prices.

  Does the rising trend in gold futures prices and the surge in previous gold reserves in various countries mean that the global “golden age” is coming?

The answer is definitely yes.

  At present, there are more than 15 long-term interest rate cuts in the world, which have released a signal of monetary easing. The actual value of financial assets will shrink to a certain extent, and the function of gold value appreciation will become more prominent.

What’s more, the currencies of emerging market countries are in a relatively weak state. In the face of the Federal Reserve’s possible interest rate cuts in the second half of the year, in order to prevent the increase and decrease of the US dollar exchange rate and the loss of its foreign exchange reserves and other assets, we must find ways to adjust our own foreign exchange reserves.Increasing gold reserves and increasing asset diversification of foreign exchange reserves to improve financial resistance to risks. This is an emergency response to a weaker dollar. If the Fed cuts interest rates, this will be a normal international financial operation.

  Although excessive holding of gold will reduce the liquidity of assets and even pay more for currency reserve costs, the current national bond yields of major countries are hovering at ultra-low levels. Relatively speaking, most of the shortcomings of gold that do not generate interest also haveReplaced by the expansion of emerging market economies, the expansion of emerging market economy countries is more looking for the security of holding assets, and increasing their holdings of gold in order to diversify the risk of foreign exchange reserves with the greatest risk aversion.

  Particularly important is the current global economic growth rate. Some economists predict a recession in 2020, coupled with trade frictions, which may further delay the economic growth cycle, and gradually realize the implementation of foreign exchange reserves in more countries 杭州夜网 in order to reduce the excess of the dollar.Relying on and refocusing attention on assets with both security and liquidity, gold has become a better risk-resistant currency operation tool.

When emerging markets encounter emergencies, gold can also effectively play a temporary “rescue” function: if Venezuela sells nearly 37 tons of gold within two years in order to repay its debt, in order to solve the debt urgency, if Venezuela does not have enoughGold, maybe the economy will fall into the abyss of no end.

  Obviously, gold is a natural currency hedging tool, whether it is a developed economy or a country-level foreign exchange reserve in emerging markets. It can effectively respond to currency sudden risks, and it can also be rebalanced through asset allocation.It is a strategic asset that can meet short-term money demand tools and create a safe monetary environment for national finance.

In general, the overall growth of various economies’ holdings of gold is in line with the times. It is both safe and necessary, so it is the correct choice for foreign exchange reserve operations.