The precious metal market is waiting for the boots to fall

International gold prices have fluctuated around $1,900 an ounce since hitting a record high in early August. Recently, the poor prevention and control of the epidemic in Europe and the United States, the new round of stimulus package in the United States is not clear, the dollar trend is repeated and other factors, make precious metals market trend unpredictable.

Several respondents said positions had been reduced to avoid possible market volatility. At present, the trend of precious metals is still unclear, waiting for the landing of major events. However, in the medium and long term, precious metals hedging function is still prominent.

Gold has undoubtedly been one of the most sought-after commodities this year. Spot gold in London is up about 25 percent this year as of 8:00 am Beijing time On Nov. 4.International gold prices hit an all-time high of $2,075.14 an ounce in early August. Since late August, the international gold price has fallen back to around $1,900 an ounce, and it has been volatile ever since.

A precious metals trader at a foreign bank in Lujiazui, Shanghai, believes most short-term investors have cut their positions. Unless the boots are on the ground, it is hard to judge the fundamental orientation of the market.

"Recently, as the epidemic has worsened overseas, some investors have also been buying gold on dips. Because from the perspective of the new blockade measures, there are still uncertainties in the overseas economy, and the hedging function of gold is still worth looking forward to.""The trader said.

Gu Fengda, head of Guoxin Futures Research and consulting department, said in an interview with Shanghai Securities News that the rebound situation in Europe and the United States is grim. Precious metals under short-term pressure and wide range of shocks are highly likely events, and silver, which has greater flexibility, faces greater volatility risk.

In the future, the introduction of a new round of fiscal stimulus package in the United States, the easing of the epidemic in Europe and the United States and other events are expected to be the driving force for precious metals to rise.

"Due to the increase in market volatility in recent days, some investors will appropriately increase their holdings of gold and silver as a safe-haven operation."Philip Streble, chief market strategist at Blue Line futures.

"In the long run, there is limited room for nominal interest rates to rise and the easing of the inflation target is conducive to the recovery of medium - and long-term inflation expectations. Fiscal stimulus will eventually be enacted and long-term asset allocation of precious metals will remain."Gu Fengda analysis said.