Spot price of precious metals

The average price of silver in the early trading on the 30th was 5,329.67 yuan/kg, which was an average of 5,279.33 yuan/kg in the early trading on the 29th; an increase of 0.95%; Kg, an increase of 0.48%; compared with the beginning of the year (01.01) silver spot price of 5550 yuan / kg, a decrease of 3.97%.

The spot price of gold in early trading on July 30 was 380.20 yuan/g, an increase of 0.37% from the spot price in early trading on the 29th; compared with the early spot market price in early July (7.1), the average early trading price was 366.77 yuan/g, an increase of 3.66%; compared with the beginning of the year (01.01) The spot price of gold was 392.70 yuan/g, down 3.18%.

2021 precious metal supply and demand data

According to data from the World Gold Council, in the second quarter of 2021, global gold consumption and investment demand increased compared with the first quarter.

Gold demand: In the second quarter of 2021, the total global gold demand (excluding over-the-counter transactions) reached 955.1 tons, an increase of 9% from the previous quarter, and the same period in 2020 (960.5 tons), a year-on-year decrease of only 1%.

The demand for gold bars and coins in the second quarter increased year-on-year for the fourth consecutive quarter, reaching 243.8 tons, an increase of 56% year-on-year, setting the best quarterly performance since 2013.

The total global consumption of gold jewellery was 390.7 tons, a year-on-year increase of 60%. The global demand for gold for science and technology was 80.0 tons, an increase of 18% year-on-year; the global gold ETF holdings increased by 40.7 tons. In the second quarter, central banks continued to maintain a steady pace of gold purchases. The global official gold reserves increased by 199.9 tons, of which Thailand, Hungary and The Brazilian central bank bought the most.

Gold supply: The impact of the epidemic has gradually subsided, and the total global gold supply reached 1,171.7 tons, an increase of 13% year-on-year.

The data in the second quarter showed that global gold consumption and investment demand are on the rise, but overall, the total global gold demand (excluding over-the-counter transactions) in the first half of 2021 was 1,833.1 tons, a year-on-year decrease of 10%; the global gold ETF has since For the first time since 2014, there was a net outflow in the first half of the year, with an outflow of 129.3 tons.

Investment demand has weakened, but physical demand has increased year-on-year. In the first half of 2021, the global demand for gold bars and gold coins was 594.5 tons, the best performance since 2013, an increase of 45% year-on-year; the global demand for gold jewellery reached 873.7 tons, an increase of 57% year-on-year, but it was 17% lower than the average level in 2015-2019 %; global central banks bought 333.2 tons of gold, an increase of 63% year-on-year, 39% higher than the average level in the first half of the past five years; global demand for gold for science and technology was 161.0 tons, slightly higher than the 160.6 tons in the first half of 2019 The demand for technology funds increased by 14% year-on-year.

The supply side has recovered year-on-year. In the first half of 2021, the total global gold supply reached 2,307.9 tons, an increase of 4% year-on-year.

Fundamentals superimposed on policy aspects, precious metals are positive in the short-term

The fundamentals of supply and demand show that the demand for gold will gradually pick up in 2021, and the supply will increase simultaneously. After the investment demand is reduced, there are signs of recovery. On the one hand, because the price of gold has fallen at a high level, it shows a certain speculative value, and market risk appetite has risen; on the other hand, it is expected to be inflationary. As a result, the demand for savings and preservation of physical gold such as gold bars and coins has risen.

On the policy side, the Fed's July interest rate decision was dovish. The Federal Open Market Committee (FOMC) decided to maintain its key interest rate at a near-zero level at a policy meeting that ended on Wednesday, which is positive for precious metals to a certain extent; US GDP in the second quarter was much lower than that It is expected that the US dollar will continue to suffer a sell-off on Friday. The dollar fell below 92. In the short-term, precious metals have received strong support recently.

Forecast

In the near future, the price of precious metals still fluctuates mainly within a range. On the one hand, although the U.S. dollar index has recently weakened, it has rebounded from a low level at the end of the second quarter in the long term, supported by downward resistance, and overall uncertainty is strong; on the other hand, inflation expectations VS interest rate hike expectations, and the Fed’s monetary policy has shifted. Expectations still exist, and policy trends will continue to drag down the trend of precious metals.

Technical indicators also show that the current operating situation is uncertain, and volatile operations are the mainstay.

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