Financial Services Association, July 2 (Reporter Peng Kefeng) In the investment market in the first half of this year, who was the happiest person? Gold investors have definitely reaped “steady happiness.”

Today, the Financial Services Association reporter found that in the first half of this year, gold prices continued to fluctuate upward. According to the data, on June 28, the closing price of London spot gold was 2326.15 US dollars/ounce, up about 12% from the beginning of the year; COMEX gold futures closed at 2336.9 US dollars/ounce, up about 13% from the beginning of the year. So, can gold maintain its upward trend in the second half of the year under the interference of many factors, such as the imminent cut of interest rates by the Federal Reserve and the imminent US presidential election?

Gold investment steadily won A-shares in the first half of the year, and the domestic gold boom was an important supporting factor

Although some people have continued to depreciate gold since last year, judging from the overall trend, gold still broke out of an overall steady upward curve in the first half of this year, and the overall performance of the market was impressive. According to relevant data, as of June 27, COMEX gold rose by about 11.6%. Meanwhile, at the close of trading on June 28, spot gold and COMEX gold rose 12% and 13% respectively from the beginning of the year, helping investors successfully complete the first half of the year.

In contrast, the A-share situation in the first half of the year was that the Shanghai Composite Index, Shenzhen Stock Exchange Index, and GEM Index fell 0.25%, 7.10%, and 10.99% respectively in the first half of the year. Obviously, overall gold investment outperformed A-shares in the first half of the year. Also, US stocks rose 14% in the first half of the year, but 60% came from the five major technology stocks, and Nvidia alone contributed more than 30%. In contrast, gold investors are no less profitable.

However, in June of this year, due to the combined effects of the news that China's central bank suspended gold purchases, hawkish statements from the Federal Reserve, and US non-agricultural data exceeding expectations, etc., there was also a correction in gold prices for a while.

Why was gold so strong in the first half of this year? In response, a macro researcher who has been tracking international gold price trends for a long time told the Financial Association reporter that the big logic is of course geopolitical risk aversion, expectations of interest rate cuts by the Federal Reserve, and the guiding role of central banks in gold purchases. However, judging from small logic, Chinese investors played an important role in international gold price trends in the first half of the year. According to the team's observations, gold investors in the London market declined markedly in the first half of the year, and capital also showed an outflow trend. According to normal logic, the price of gold should fall, but quite a bit of capital continued to pour in from the domestic gold investment market, causing international gold prices to remain high. “In an exaggerated phrase, the Chinese people still supported the strong position of gold in the first half of the year.”

The second half of the year was still off to a good start, and many institutions emphasized short-term risks

Entering the second half of the year, gold remained strong. In the early morning of July 2, COMEX gold closed up 0.1% to $2341.9 per ounce. So, can gold still “refuel in the air” in the second half of the year and reach a new high? Recently, a number of organizations have also expressed their views.

On July 1, Ye Qianning of Guangfa Futures published an article stating that despite repeated macroeconomic news effects recently, precious metals will maintain the turbulence in the box when they lack new profit drivers for the time being. Macroeconomic data shows that some data is fragmented. As demand for real estate continues to weaken or steadily cools down in the second half of the year, the central bank's shift to easing provides some support for precious metals, but geopolitical risks may ease. The Federal Reserve cut interest rates late. Furthermore, the price of gold remained relatively high, causing central banks such as China to suspend gold purchases recently. At the same time, physical consumer demand has also been affected. Gold inventories on futures exchanges have risen markedly, and relatively sufficient short-term supply inhibits the gold trend and makes it difficult to achieve an effective breakthrough in the gold trend.

On July 2, China Aviation Futures Wang Nan published an article stating that looking ahead to the second half of the year, the gold market may continue to benefit from factors such as anticipated interest rate cut transactions, geographical events, and the US election to remain strong. However, the short-term approach is volatile. Currently, the Federal Reserve has an hawkish attitude, high US bond yields and the US dollar index, combined with the increase in gold holdings by the Central Bank of China, which suppresses precious metal prices. In short, the medium- to long-term market may still end in the future, but short-term risks are beginning to emerge, and gold prices may have repeated risks in the second half of the year.

The US presidential election may be a disruptive factor. Some analysts say the gold cycle is not over

A Financial Services News reporter noticed that judging from industry analysis, they all basically viewed whether geopolitics would ease and the US presidential election as uncertain factors about the gold trend in the second half of the year.

So, Trump or Biden, who comes to power is more beneficial to gold? On July 2, Liu Shiyao of Zijin Tianfeng Futures pointed out that the two candidates seemed unwilling to prevent high fiscal spending, so no matter who was elected, US debt would spiral up, leading to higher inflation expectations and higher term premiums for long-term debt investors. In contrast, Trump's policy proposition is more inflationary, and his intervention in the independence of the Federal Reserve may further ignite financial conditions, thereby boosting the price of gold.

On July 1, Xu Ying of Eastern Stock Exchange Futures pointed out that the current market's interest rate cut expectations for the Federal Reserve have been trading for a long time and are waiting for the boots to land. The two interest rate cuts under the benchmark assumption are already reflected in asset prices, and the real opportunity for gold comes from nonlinear interest rate cuts in the event that exceeds expectations. Gold is still one of the few assets that provide certainty. The consolidation pattern is expected to continue in the early third quarter. We can focus on pullback buying opportunities, and the yearly upward cycle will continue.

In response, the analyst mentioned above also told the Financial Federation reporter that short-term gold prices are unavoidable. However, the emergence of a strong dollar and strong gold at the same time means that the investment logic of gold is different from the past, and the monetary properties of gold are receiving more attention. Also, from the perspective of supply and demand, the gold boom cycle is not over yet. According to their team's research, the key factor in the last round of gold price collapse was that producers increased the supply of gold, and with the release of the 2023 annual reports of major companies, the capital expenses of major international gold producers have not increased, which means that current gold mining is still in a contraction period. In a context where supply will not increase significantly in a short period of time, and demand in the international gold market continues to be strong, it is still difficult to say that the price of gold has peaked.