2. A source in the German coalition government said on Tuesday that German Chancellor Angela Merkel opposed raising the ceiling of the European Stability MechaniPrecious metal scalesm (ESM) lending capacity of the euro zone's permanent rescue mechanism. The source said that Merkel said that ESM has nothing to do with enhancing the ability of the International Monetary Fund (IMF) to lend.
After a week of great ups and downs, the shock to the market by the ups and downs of gold and silver futures has not disappeared. Domestic Jinmin not only has lingering fears, but also quite emotional: why the domestic transaction time is so short. If there is greater turbulence in the external market during trading hours, the risk aversion of domestic investors will become precarious. Industry insiders strongly urge that domestic exchanges can consider extending the trading hours of gold to better help investors avoid the risk of sharp price fluctuations.
The European Central Bank also increased its gold holdings in 2018. Hungary is one of the largest buyers. Its gold reserves in October increased tenfold to 31.5 tons, the highest level in nearly 30 years. The Polish Central Bank increased its gold reserves by 25.7 metric tons in 2018, a year-on-year increase of 25%. In addition, the central banks of Australia, Germany, Turkey, Kazakhstan, India, Mongolia, and Iraq are also actively deploying gold.
In terms of geopolitics, Russian Foreign Minister Lavrov yesterday said in a speech on the situation in Ukraine that if the Kiev authorities end their military operations in the southeast, the militias in the region will also cease operations. However, the current situation has prevented both parties from communicating normally, which is very likely to expand the situation in the future and have serious consequences. In addition, Lavrov warned that if Ukraine signs a joint agreement with the European Union, Russia will cancel its most-favoured-nation trade mechanism. Regarding the establishment of humanitarian corridors in southeastern Ukraine, Lavrov gave support, but also warned Poroshenko not to equate the establishment of humanitarian corridors with military operations.
IMF Chairman Christine Lagarde stated that the IMF does not agree with Euro Group Chairman Jean-Claude Juncker, who said that the realization of the debt-to-GDP ratio achieved by Greece needs to be delayed by two years (originally Greek The ratio needs to be controlled from the current 190% to about 120% in 2020).
Bernanke’s talk is believed to be the main reason. Data from the US Commodity Futures Trading Commission (CFTC) on July 9 showed that gold futures and options net long ordersPrecious metal scale held by speculators increased by 4.1%, making short bets a record high, and gold net long orders continued to increase. Bernanke stated the following day that in the foreseeable future, the U.S. economy still needs to be supported by an adaptive monetary policy. Industry analysts believe that investors continue to buy gold after Bernanke’s remarks. They originally expected the reduction of stimulus measures to begin in September, but it may be postponed to next year.
However, from the perspective of industry insiders, in a market dominated by investment sentiment, the risk of participation by ordinary investors is still extremely high. The traditional investment concept is that gold can avoid the risk of inflation, and excessive currency issuance will push up inflation. Industry insiders believe that some investors enter the market with expected inflation, but in fact, currency issuance, inflation and gold investment are not necessarily related in history. For ordinary investors, gold should be regarded as a category of diversified investment portfolios of household assets.