Starting in the second half of 2010, the gold price was like a wild horse dislocated, rising from 1182 US dollars per ounce to a record high of 1,387 US dollars per ounce, an increase of up to 17%. At the same time, the international iron ore negotiations started again, and the three largest suppliers of iron ore committed themselves to pushing up prices. The similar situation with iron ore price and gold price is that in the same period, the prices of base metals such as copper and aluminum have risen irretrievably and they have entered the price increase channel.
In the interview, the author learned that there is no strong demand support behind the basic metal price increase, and that the monetary policy and the speculation of middlemen are concocting the abnormal supply-demand relationship.
Rising demand for gold does not rise
In early 2010, the price of gold was at a low level. In China Gold Group's sales stores, individual customers began to appear to buy gold bars with several hundred thousand dollars. However, this trend has not spread. “Now, the price of gold has increased a lot, and our sales have There is no breakthrough in growth,†said Jiang Yuntao, vice president of sales for China Gold Group.
Jiang Yuntao mentioned in an interview with the author at the beginning of the year: “Some experts analyzed that the price of gold may exceed 1,500 US dollars per ounce this year.†However, the gold price that was in the downtrend was not optimistic.
In the second half of the year, international gold prices began to exert their power, rising from $1,182 per ounce to $1,387 per ounce. Regarding the reasons for the rise in the price of gold, Jiang Yuntao believes that “it is a combination of factors that influence the price of gold, including the depreciation of the dollar and the expectation of economic inflation. The formation of gold prices is very complicated.â€
Although strong inflationary expectations led to higher prices, the demand side has not seen an increase.
Currently, China National Gold Group is China's largest value-added gold bar sales company. While the international gold price has risen, domestic gold prices have also maintained a rising trend. However, “from the point of view of sales volume, there has been no significant growth.†Jiang Yuntao The author revealed.
China is the world’s largest producer of gold and the second largest consumer of gold. The World Gold Council expects that China’s demand for gold will double within 10 years, which will have a positive effect on gold prices. However, in this round of rising gold prices, the impact of supply and demand has been minimal.
In fact, the response of the domestic consumer market to the calm of the gold price made Jiang Yuntao unexpected. “Obviously, there is no trace of consumption driven by rising gold prices, and there is no sign that the demand is driving the gold price. The relationship between supply and demand does not play a significant role. The overall sales The feeling is very smooth."
On July 22, six central ministries and commissions, including six ministries and commissions, jointly issued the “Some Opinions on Promoting the Development of the Gold Marketâ€, with the aim of further liberalizing the gold market, allowing the Chinese gold market to have more “financial attributes†and deepening the function of storing gold.
However, China’s gold market performance remained stable only from the sales of gold bars with stored value functions, although there were reports that sales of gold jewelry once increased, “but gold jewelry does not have the function of preserving and storing value, so it cannot Counted as financial and investment needs.†Jiang Yuntao said, “Factors other than the supply and demand relationship have a huge impact on gold prices.â€
Iron ore prices fall into a spiral
The price of iron ore, which is also not affected by the supply and demand relationship, is also in a turmoil.
A northern iron ore trader is puzzled by the iron ore market. "Now domestic iron ore prices are higher than international iron ore prices."
There is a small amount of iron ore in the hands of this trader. The domestic iron ore price is currently US$150/ton, and it is in a period of slight increase. "Because the demand for iron ore is decreasing, the market outlook is very uncertain, so no one dares to buy a lot of goods.
Recently, due to the fact that most domestic steel mills are unable to fully release their production capacity due to power cuts and restrictions, the domestic demand for iron ore is declining. According to data from October, the number of imported iron ore in China is decreasing.
"But the domestic iron ore prices are very strong." The iron ore trader said to the author.
“Several steel mills reduced their offer for spot iron ore in the past few days, but no traders are willing to sell them. Under circumstances, steel mills can only increase their bids to purchase iron ore.â€
“Actually, as local governments have cut down on electricity, the number of steel mills started is decreasing, and the demand for iron ore has actually been reduced. Both international and domestic conditions are not enough to support the rise in iron ore prices.†Said, "However, iron ore traders are still strong prices and do not let go."
The reduction in production capacity under the influence of power cuts and restrictions has already begun to directly affect steel prices. “There are fewer enterprises that can produce steel. The recent steel prices have risen rapidly,†said Wang Dayong, secretary general of the Hebei Iron and Steel (000709) Association.
In the first week when local governments took measures to cut power, the steel price rose 4.8% to 5.6%, and there was a sudden surge. “The rise in steel prices has led to high spot iron ore prices due to the related relationship between iron ore prices and steel prices,†said Wang Dayong.
Ma Zhongpu, an industry expert, graphically described the relationship between iron ore price and steel price. “In fact, it is the game of interest in the industry chain. Iron ore companies see that the steel mills are profitable, so they have to maintain profitability and will not take the initiative to cut prices. This is inconsistent with the downtrend of international steel prices.†In short, “Traders believe that demand from steel mills can raise the price of ore.â€
A trader disclosed to the author: “Large companies can obtain price cut iron ore through long-term agreements in the international market, and maintain high prices in the Chinese market. The market supply and demand are now in a stalemate. ."
Market risk accumulation
Lack of supply and demand base, the trend of the underlying metals will become confusing.
“At present, the United States still adopts a loose monetary policy, which will lead to the continued devaluation of the US dollar, and then the metal prices settled in US dollars will keep rising.†Industry expert Ma Zhongpu believes.
In addition, "from the formation of iron ore prices, speculators already exist in all aspects of the value chain. And slower consumer growth, making the relationship between the demand side and speculators subtle, the late price fluctuations, will be a game process Ma Zhongpu said, "In addition, we must note that China is trying to settle commodity prices with ***, which will also affect metal prices."
Traders of iron ore think that the prospects of the iron ore market are very uncertain and the risk is still increasing. Everybody is afraid to sell goods now. The main reason is that the situation of power cuts will not be reduced until the future is known. Demand situation.
"Now, I haven't heard the specific time when the power cut was stopped," said Wang Dayong, secretary-general of the Hebei Iron and Steel Association. "It depends entirely on the situation of local governments to complete energy-saving and emission reduction tasks."
Differences in future price movements also exist in the gold price forecast.
Jiang Yuntao still maintained the optimistic view at the beginning of the year. “No one can accurately predict the price of gold, but I reserve the forecast for the long-term rise of international gold prices.â€
However, Zhao Xiangbin, a well-known gold investment analyst, believes that gold prices will fluctuate in the fourth quarter. "I think the price correction is now quite strong. Now that the price of gold is around $1,358/oz, if it breaks this high, it may trigger a new adjustment."