Previously, under the bullish factors of 'Trump trade', interest rate trade, and geopolitics, the $gold main contract (2412) (GCmain.US)$ once approached the $2500 level but has since returned to a volatile state. Currently, the market is waiting for the latest guidance on future interest rate cuts from this week's FOMC meeting. However, before the meeting, more and more people have joined the long camp and bet on the continued rise of gold prices. 'Big Short' traders Danny Moses, Vincent Daniel, and Porter Collins stated that gold is one of the most important long-term investments in their investment portfolio, and they are now focusing on this strategy. The three 'big shorts' are betting heavily on the rise of the gold price.$Gold Futures(DEC4) (GCmain.US)$Currently, the market is waiting for the latest guidance on future interest rate cuts from this week's FOMC meeting after the $gold main contract (2412) (GCmain.US)$ once approached the $2500 level but has since returned to a volatile state.
However, before the meeting, more and more people have joined the long camp and bet on the continued rise of gold prices. 'Big Short' traders Danny Moses, Vincent Daniel, and Porter Collins stated that gold is one of the most important long-term investments in their investment portfolio, and they are now focusing on this strategy.
The three 'big shorts' are betting heavily on the rise of the gold price.
"Big short" traders Danny Moses, Vincent Daniel and Porter Collins, all famous for shorting the real estate market during the subprime crisis, said that gold is one of the most important long-term investments in their portfolios and they are now focusing on this strategy.
Collins believes that the large-scale purchase of central banks around the world and the US budget deficit are reasons to buy gold. 'I think that in...one, two, three, five, ten years, the money you make on gold will far exceed the money you make on US Treasuries, and I don't think this will change.'
Regarding central bank gold purchases, Juan Carlos Artigas, head of research at the World Gold Council, stated that under the influence of geopolitical conditions, central banks have become the main buyers of gold. In 2023, the central banks of various economies in the world added 1,037 tons of gold reserves, which is second only to the record set in 2022, and the average annual purchase volume in the past ten years was about 500 tons, which shows that it has doubled now. 'The future increase may not be that great, but the trend will continue. In the medium to long term, it is expected that gold will become a more important strategic asset.'
Regarding the US budget deficit, the latest data from the US Treasury Department shows that the scale of US federal government debt has exceeded 35 trillion US dollars. Recently, more and more US politicians, businessmen, and economists have expressed concerns about the US debt problem. EJ Anthony, economist at the American Enterprise Institute, recently stated that in June of this year, the amount of interest on federal debt repayment in the United States was equivalent to 76% of that month's personal income tax revenue. Tesla CEO Musk recently posted about this, saying that 'the United States is heading towards bankruptcy.'
In addition, Daniel and Collins' company emphasized gold in their annual report to shareholders this month. They wrote, 'We are neither bearish nor bullish, but we see a slight economic slowdown, we will continue to hold a net long position in gold, which is a strange combination of special long ideas. We still have great expectations for gold, gold mining companies, silver, platinum group metals, and bitcoin.' They wrote, 'These assets will support our theory of US dollar depreciation. In the past four years, this theme has been intermittently present, but we have bought almost every time there was a correction.'
The Fed rate cut seems to be the next catalyst for the rise in gold prices.
Nick Timiraos, a well-known journalist known as the 'New Fed Communications Agency,' wrote on Monday that although Fed officials are unlikely to adjust interest rates this week, this meeting will still be one of the most important meetings in the near future. The Fed has held four meetings this year, and at each meeting, interest rate cuts have been considered for future consideration. But this time, developments in inflation and the labor market are expected to signal that an interest rate cut is likely to happen at the September meeting.
Timiraos believes that the July interest rate meeting, which is scheduled to end on Wednesday, may prompt Federal Reserve Chairman Jerome Powell to make up his mind early. Powell has long weighed the pros and cons of early rate cuts and waiting too long. Now officials are increasingly concerned that waiting too long will undermine the soft landing. Powell told lawmakers earlier this month that achieving the Fed's 2% inflation target while keeping the labor market healthy was the "head first" priority.
Of course, Timiraos also said that although there are more and more reasons to cut interest rates, officials are unlikely to cut interest rates this week, partly because this is likely to be the first cut in a series of interest rate cuts. In the past, there have been unexpected situations where inflation exceeded officials' expectations. Officials hope to see more evidence of real cooling in inflation before crossing the threshold of interest rate cuts.
Analysts said, 'Although the market has already priced in expectations of an interest rate cut, actual policy decisions will make investors confident about the future direction of interest rates and promote continued inflows of funds.'
How to seize the opportunity of rising gold prices? As gold ETF trading is convenient, liquid, and available for online trading during the trading session, investors can capture the opportunity of rising gold prices by investing in ETFs.
In fact, gold ETFs are one of this year's investment themes. From the perspective of the cumulative gains and losses from the beginning of the year to the close of July 29th, mainstream gold ETFs have risen by more than 15%, leading the 14.54% increase in the $gold main contract (2412) (GCmain.US)$.
There are still other gold ETFs available on the market in addition to the aforementioned ETFs, and mooers can click on Market>ETF>Thematic ETF>Gold ETF to view~$SPDR Gold ETF (GLD.US)$,$Gold Trust Ishares (IAU.US)$Major gold etfs have all risen by over 15% this year, leading the 14.54% increase.$S&P 500 Index (.SPX.US)$A growth rate of 14.54%.
Editor/Jeffy