Gold plummeted by $20.
Reason one:
Due to high optimism that major economies will relax COVID-19's lockout measures, US stocks still maintained a strong upward trend this week. The Standard & Poor's 500 Index closed higher on Tuesday, rebounding more than 40% from its recent low in March. In the past seven trading days, the Standard & Poor's 500 Index and Nasdaq have closed for six trading days.
Although the domestic turmoil in the United States is still intensifying, optimism about the economic restart has overshadowed this concern, and the market focus is still on the economic recovery under the COVID-19 epidemic. At the same time, although some media reported that China suspended the purchase of American agricultural products, which caused market worries to some extent, the latest news showed that the Sino-US trade situation showed no signs of deterioration. According to Reuters, enterprises in China still bought at least 6,543,808 tons of American soybeans from Minlang elegy on Monday, and will ship them at 654.38+00 or 654.38+065.438+00. Together, these factors have boosted market risk sentiment and prompted funds to flow out of dollar assets and into the stock market. Optimism about the economic restart still exists, which is reflected in the continuous rise of the stock market. Under this premise, it is easy to understand that gold may be slightly fragile.
Reason two:
According to statistics, from 23: 28 to 23: 30 Beijing time, COMEX's most active gold futures contract sold 5543 lots in three minutes, with a total value of more than 950 million US dollars. Gold fell by about 20 points because investors fled for profit.
Of course, because there are many risk-averse factors in the market recently, we can't assert that gold will continue to fall with a small amount of funds, because the uncertainty of the second outbreak of the epidemic, the situation in China and the United States, the protests and riots in the United States, and the continuous decline of the US dollar have all provided risk-averse power for gold bulls.
At the same time, this week, US President Trump made a speech in the White House Rose Garden, vowing to? Right away? Ending the turmoil in major cities, the news brought some support to safe-haven gold and limited the overnight decline of gold.
The riots in the United States are getting worse. Is Trump's political road dangerous?
The death of African-American Freud in the process of police enforcement triggered fierce protests across the United States. The government imposed a curfew to suppress the protests.
It is reported that this is the first time that new york has imposed a curfew, which will last from 23: 00 to 5: 00 the next morning. During the curfew, it is forbidden to go out except necessary workers.
At the same time, in response to the growing demonstrations, US President Trump 1 made a national speech for the first time, calling violent protests? Domestic terrorism? In States where riots and violent conflicts cannot be quelled, he will use the army.
Why does this president always like to fight violence with violence?
In the eyes of some Americans, on the one hand, this is because of Trump's personality; On the other hand, greater political calculations are not ruled out.
First, Trump has always made himself a tough guy. Now this tough guy has been challenged like never before, and he flew into a rage. An emotional president is inevitably emotional, and he must stand at the door of the church, which is an example.
Second, it must be noted that many people who support Trump are white-left forces, and Trump is now in a dilemma. Black people are unlikely to support him anyway; But give in to the demonstrators, he said? The silent majority? Maybe give him up, too
Third, it is not excluded that some Americans speculate that if the United States falls into greater turmoil or even civil war, it will actually be more enjoyable for Trump, and the possibility of being re-elected as president in wartime will greatly increase.
After all, almost all the latest polls show that Trump, the two presidential candidates, lags behind Biden. If the election is held now, Trump will almost lose.
According to an institutional survey, more than 55% of Americans disapprove of Trump's handling of the protests after Freud's death, and 40% of them said? Strong? Disapprove. An analyst of CNN wrote that Biden was ahead of Trump in more than 40 opinion polls in the United States in May this year, and Biden's lead was also very significant, with an average of 6 percentage points ahead of Trump.
Therefore, the result is simple: if you are soft, Trump will definitely lose; If you are tough enough, there may be hope for a comeback.
But the president of a country, when he was in power, had such a serious racial discrimination incident, which subsequently triggered the worst national riots in decades, so that he was forced to enter the White House bunker, not to mention the death of 654.38 million people in COVID-19. Trump is enough to go down in history.
But America, the worst may not come yet.
Looking forward to this trading day, the market will focus on the ADP employment changes in the United States in May and the final value of durable goods orders in April. At the same time, the Bank of Canada (BOC) will announce its interest rate decision, and President Poloz will welcome a curtain call. If the ADP employment data in the United States still fails to show obvious signs of improvement, the dollar will be further suppressed, and gold may soar, and vice versa.
Small non-agricultural enterprises appear as scheduled, can there be a dawn in the US job market? Of course, the most important data today is the number of ADP employees in the United States in May. The market is expected to decrease by 9 million, with the previous value of 20.236 million. After the cliff-like decline in April, I believe that the market will not have much expectation for this ADP employment report. What investors need to pay attention to is whether the speed and intensity of layoffs of American companies have slowed down, and whether most retail stores closed due to the epidemic will reopen. In view of the different situations of various industries, Bank of America made an interpretation in its latest report. Accommodation and catering services are the industries most affected by the epidemic. There may be 2.5 million unemployed people in May, and the cumulative number of unemployed people in three months will reach 9.3 million. In addition, there are more than 500,000 unemployed people in retail trade, medical and social assistance, management and support services, arts, entertainment and public administration. As for the market situation after the announcement of small non-agricultural enterprises, it is expected that the data will have little impact on US stocks, but the foreign exchange market may change. The dollar has been falling for days and the market is in chaos. Some analysts believe that safe-haven funds are increasingly flowing into the gold, silver and US debt markets, and the attractiveness of the US dollar is declining. If the employment data explodes again, the dollar index may fall sharply and gold will profit.
A huge risk is approaching. . .
Looking back at the abnormal spread in March, a big secret was revealed ... Just two months after the accident of the abnormal spread of the golden period, gold seems to have recovered from the shock. With the steady rise of gold, driven by arbitrage enthusiasm, a large amount of gold is being continuously transported to the New York Mercantile Exchange (hereinafter referred to as COMEX). However, the spot price difference in the golden period seems to have expanded recently. Looking back on the accident in March, a terrible guess seems more and more likely to come true? I'm afraid no amount of gold can stop the spread from happening again? Split? . Not only that, there are signs that some banks have taken the lead in fleeing the scene. ......
In the past two months, about 550 tons of physical gold poured into the United States from all over the world and was deposited in the delivery warehouse of COMEX gold futures. COMEX's gold stocks soared to a record 26 million ounces.
This is a huge number, and a net increase of only 550 tons is enough to rank 1 1 in the gold reserves of central banks around the world!
Photo: COMEX's physical gold inventory surged by 550 tons in the past two months.
Why is this happening?
Traditionally, most gold futures transactions are settled in cash and rarely delivered in kind. What happened behind this unprecedented transfer of physical gold?
The most superficial reason is that there is a rare price difference between futures prices and spot gold. This price difference creates a good environment for arbitrage.
Figure: In this trend, the spot price difference in the golden period once expanded to around $75/oz.
The so-called gold spot arbitrage is simple to understand: because new york futures gold is 70 dollars higher than spot gold per ounce (this figure is taken as an example), you can sell a futures contract in new york futures market, then buy the corresponding 100 ounce of physical gold in the market (new york futures contract is 100 ounce) and ship it to new york for delivery, so you can earn (70%) without risk.
The long-term existence of this price difference has stimulated the arbitrage behavior of the market, making? Market forces? Search for physical gold all over the world and transport it to the United States.
Behind this simple phenomenon and explanation, there are two points worthy of in-depth discussion? Phenomenon? : 1. Arbitrage profit does not come out of thin air. Someone has to pay for this. Who is paying the bill? After the gold futures contracts delivered in February and June continued to raise the spot price substantially, the spot price suddenly increased by nearly $20 near the delivery date. Why?
These two problems are actually one problem. There are only two factors in the futures market: bulls and bears. Arbitrators are obviously short sellers in the futures market? Short selling contracts to lock in the difference between them and buying physical gold. So to put it simply, futures bulls provide a source of profit for futures bears.
Who is the super bull in new york gold futures market? The answer is: American banks.
The latest market news shows that banks such as HSBC and JPMorgan Chase, which use gold futures to hedge the risk of spot gold, are reluctant to hold new york gold and future positions on a large scale. Because of the large spot price difference, the bank's gold and future positions lost tens of millions of dollars, and HSBC lost 200 million dollars in one day.
Why are banks bullish on gold futures?
Here are two easy-to-understand examples: on the one hand, banks need to meet customers' demand for physical gold. When customers place orders, banks need to lock prices through the futures market first. At this early stage, when the gap between spot gold prices is very small, usually less than $65,438+0, banks can cover all costs by way of premium to customers' quotations and transaction fees to achieve profitability; On the other hand, banks have their own gold wealth management business. In gold financing transactions, banks are gold lenders and need to go through long positions in the futures market? Hedge? This position.
Banks are the largest users of Comex gold futures, accounting for about one-third of all Comex futures.
In addition, when the futures settlement date approaches, the premium of the futures price relative to the spot price is reversed to discount. What's going on here?
We know that the whole futures trading is a zero-sum game (if the transaction fee is counted, it is a negative sum game): the money won by the bulls is the money lost by the bears; On the contrary, the money won by bears is the money lost by bulls. In the end, the total amount of money in the fund pool remains unchanged. Since the arbitrage bears lock in the winning money by buying the spot and selling the futures, then the bulls who finally participate in the delivery will definitely have a book loss? The money lost by the bulls involved in the delivery of the contract is reflected in the spot price discount when the contract approaches or reaches the delivery date.
How will the future evolve?
First of all, gold futures have maintained a large premium on the spot, which makes banks lose money in gold futures trading, which may make banks try to cut unnecessary long positions in gold, such as stopping gold financing business. Actually, starting with the futures market? Witness history? Since then, many banks have reduced Comex gold futures trading because they are worried that the price difference between futures and spot may widen again. According to sources, some banks intend to reduce the open futures by 50%-75%.
Therefore, there may be fewer bulls, and short positions of arbitrage bears will suppress the price of gold and make the super premium disappear. In the short term, gold prices may be under pressure.
Of course, this is only a theoretical process, and the actual situation needs to pay close attention to the changes in Comex's physical gold inventory: if the inventory continues to accumulate, it means that the demand for physical delivery is lower than the supply, and most bulls' demand is not to obtain physical gold, but only to bet that the future price will be higher, so the possibility of a sudden decline in that kind of gold will become more and more serious in the short term: because the purpose of these bulls holding gold is? Speculation? Yes, in the end, it is not holding physical gold, but getting more legal tender.
Unless there is an all-round systemic collapse, what do you mean? Gold investment? 99.999% of the time, the final fate is to change back to legal tender, and the rest is only a matter of time and opportunity.
The fact is that big banks are fleeing COMEX, and some central banks have become guilty. All these actions are like a silent warning to the market? If no one is willing to bargain-hunting, what will the gold price difference be? Split? .