Gold "safe harbor" status shakes

On October 7, the United States New York Mercantile Exchange (COMEX) gold ** closed down, December gold closed at 1,635.80 US dollars an ounce, down 17.4 US dollars, a decrease of 1.05%.

Market participants pointed out that after the international credit rating agencies downgraded Italy and Spain’s sovereign credit rating, Belgium’s local currency and foreign currency bond ratings were added to the negative watch list. This intensified investor’s pessimism over the economy, causing the US dollar index to rise sharply and the stock market to decline. Market funds have withdrawn gold investment in order to make up for the loss of stock assets.

Many analysts believe that the status of gold "asset safe haven" has long since been shaken. Before this, each time the global financial market situation deteriorated, it would stimulate the rise in gold prices. COMEX gold futures also hit a record high of 1923.7 US dollars per ounce on September 6. However, now that there is unfavorable news in the macro economy, the price of gold has fallen sharply.

Sun Yonggang, a precious metal analyst at Everbright's macroeconomic strategy department, pointed out that precious metals have partially lost their original financial attributes and have become leaders in the decline of commodities. At present, the price of gold is very sensitive to the direction of the US dollar and it is an indicator of the decline of commodities.

Wang Jun, dean of the Beijing Intermediate Research Institute, believes that the ongoing deepening of the debt crisis in Europe has also added more uncertainty to the global economy. The probability of debt defaults in Italy and other countries has risen sharply, and the eurozone economy is shrinking. Sex indicators all indicate that the euro zone economy will deteriorate further in the coming months. The worsening debt crisis in Europe means that many member states will commit to implementing fiscal austerity measures that will weigh on the European and global economies. Against this background, the dollar is expected to continue to strengthen against the euro. Wang Jun expects that the US dollar index will maintain a strong upward trend in October, or impact the 80 mark.

Ye Yanwu, head of the Everbright Research Institute, also believes that the US dollar index hit a low of 72.7 at the beginning of May may be the low point of the US dollar index during the year. He expects the US dollar index will remain upward trend, and precious metals such as gold and silver tend to air.

Sun Yonggang believes that the current market mentality is still not stabilized, the precious metals before the holiday season even appeared retaliatory decline. As of the week of October 4, the non-commercial position of the Commodity Trade Commission (CFTC) declined by 1,088 contracts, a further decline, which gave the gold market a bullish tone.