What Drove The Gold Price Up?

On Monday, the reform measures of interest rate liberalization announced by the People's Bank of China last Friday triggered the market's reaction to China investment It is expected that the investors will purchase gold on a large scale to avoid risks. The price of gold rose sharply and broke the US $1300 per ounce threshold for the first time in five weeks; On the other hand, the decline in the US dollar exchange rate over the same period also supported the rise in the prices of various commodity futures contracts priced in US dollars, including gold, which helped the gold price rise the most in a single day in more than a year. The main gold contract closed at US $1336 per ounce in over-the-counter trading.

Main force of New York Mercantile Exchange in August gold The contract rose $43.10, or 3.3%, to close at $1336 per ounce on Monday. This is the first time since June 19 that the main contract has closed at more than US $1300 per ounce. Regardless of the percentage or absolute value increase of the US dollar, this is the biggest single day increase of the main contract since June 29, 2012.

The ICE dollar index, which tracks a basket of six major currencies, fell to a four week low of 82.047 early Monday. The relatively weak US dollar exchange rate reduces the cost for investors using other currencies to hold commodity futures contracts priced in US dollars, including gold, which is an obvious support for prices.

The People's Bank of China announced on Friday that it would lift the control on loan interest rates and allow financial institutions to set their own loan interest rates. The analysis points out that this actually removes the lower limit of bank loan interest rate, but does not remove the upper limit of deposit interest rate. Chinese households have always been the second largest gold buyers in the world, and may even win the first place in the world in 2013 because of India's restrictions on gold imports, "The cost of borrowing is lower, but depositors do not get benefits, which means buying gold".

In terms of economic data, the data provided by the National Association of Real Estate Brokers shows that the sales of existing houses in June fell by 1.2%, and the annual total adjusted quarterly is 5.08 million, far less than the average expectation of economists of 5.28 million. The data further expanded the decline of the US dollar exchange rate.

Capital Investment Macro Economics In a research report on Monday, experts pointed out that although the mainstream of the market believed that the silver price trend would surpass gold, they still believed that the silver price would continue to perform less well than gold in the future, considering the relatively small size of the silver market and the lack of liquidity, as well as the greater dependence on the global economic trend.

According to the latest forecast of Keyvia Macro, the gold price will be US $1360 per ounce by the end of 2013, higher than the previous forecast of US $1320 per ounce; At the end of 2014, there will be $1440 per ounce, which is also higher than the previous forecast of $1400 per ounce. The forecast value of silver price at the end of 2013 is $20.50 per ounce, and it will fall to $19 per ounce by the end of 2014.

In terms of other metal prices, silver in September rose $1.05 sharply on Monday, closing at $20.51 per ounce, up 5.4%; September copper futures rose 4.5 cents, or 1.4%, to US $3.19 per pound over the same period.

Platinum in October rose $16.80 on Monday, closing at $1448 per ounce, up 1.2%; Palladium rose 70 cents in September to close at US $750.45 per ounce, up 0.1%.