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Risk Aversion Soared &Nbsp; Gold Rose 2.4% To $1784.30 On Wednesday.

2011/8/11 10:34:00 48

On Wednesday, the global stock market again showed a sharp fall in the trend of large area, prompting investors to seek safe assets to avoid risks.

Gold prices continued to refresh their price records, pushing for the first time a breakthrough of $1800 an ounce.

Main force

gold

The contract closed at $1784.30 an ounce.

New York commodity

paction

The main gold contract in December rose 41.30 dollars on Wednesday, closing at $1784.30 an ounce, or 2.4%.

The contract rose to $1801 an ounce, which is a new intraday price record and the first gold price to break the $1800 position per ounce.

The Federal Reserve issued its latest interest rate decision statement on Tuesday, promising to keep ultra-low interest rates at least until mid 2013. This decision is expected to further reduce the opportunity cost of holding gold and is also effective in supporting its price.

HSBC New York precious metals analyst Jim Staier (Jim Steel) pointed out that "the market volume is still quite high, the downward pressure on the stock market still exists, showing that investor confidence is still insufficient."

He pointed out that the Fed's statement on Tuesday continued to affect the market trend.

The Fed lowered its position in Tuesday's statement.

Economics

The growth rate is expected to begin and discuss various ways to stimulate economic recovery.

In the same day's statement, the Fed also acknowledged that the current economic situation means that the Fed Fund will maintain "ultra-low level" in at least two years.

In a low interest rate environment, there is no need to pay dividends or interest payments, and the gold that needs to be spent on cost becomes more attractive to investment.

The increase in real interest rates is a negative factor for gold investment, which will encourage investors to sell gold and obtain funds so as to avoid losing assets with higher returns.

Rating agency Standard & Poor's announced late Friday that the US AAA credit rating was downgraded, coupled with a series of disappointing economic data before, the global economic growth will slow down, and the US dollar will continue to depreciate.

Analysts at Commerzbank think, "the opportunity cost of holding gold can be said to be unusually low. On the other hand, once the Federal Reserve loosened monetary policy further, the risk of inflation could also increase."

On Wednesday, global stock markets and most other asset classes went down in the context of market rumors that the French AAA credit rating might be downgraded. The French financial sector declined notably, and the cost of guaranteeing French treasury bonds also increased significantly.

VTB's capital analyst said in a report on Wednesday that the downward trend in gold prices will depend on when the Fed will take a hawkish stance.

Long term ultra-low monetary return is good for gold. Before monetary tightening becomes an urgent threat, it is unlikely that we will see a sustained decline in gold prices.

And after Tuesday's gold price record was born, there are also some.

Investor

Start adjusting positions to achieve profitability.

SPDR gold trust, the world's largest gold guarantee exchange trading fund, has dropped to 1297 tons, and its holdings are still 1310 tons on Monday.

Other metals, silver prices continue to follow the trend of gold, September contract rose 1.44 U.S. dollars, closed at 39.33 U.S. dollars per ounce, or 3.8%, and copper fell 8 cents in September, closed at 3.89 U.S. dollars per pound, or 2.1%.

Platinum rose $15.30 in October, closing at $1771.70 an ounce, up 0.9%; in September, palladium dropped $7.75, or $726.80 an ounce, or 1.1% in October.