This year, the gold market has been sluggish after the Spring Festival. [Photo: nddaily.com]
As a traditional investment product, gold has been favored by almost everyone. But this year, the gold market has been sluggish after the Spring Festival. Falling prices have disappointed some investors, while making others happy. Li Dong has the details.
In contrast to the gold market in the past, the price of gold this year after the Spring Festival did not rebound.
In the global market, according to the COMEX division of the New York Mercantile Exchange, gold futures ended last week with a loss of 0.7 percent, ended March with a gain of 1.1 percent, and ended the first quarter of 2013 with a loss of 4.8 percent.
In China just before the Spring Festival, the domestic gold price was 336 yuan per gram. Now the price is at about 320 yuan per gram.
Influenced by the global market, the domestic gold market is experiencing both a boom and a decline. Many individual investors who expect to sell their gold are destined to wait longer, while many others are eager to buy because they believe the right time has come.
Experts say the declining gold price is partially due to macroeconomic figure reflecting an optimistic trend. This has prompted global investors to withdraw their capital from the gold market and put it in the stock and currency markets for higher returns. Another reason is that the hedge fund investors have sold off their gold and silver for U.S. dollars.
Zhao Xianwei, a gold market analyst at Galaxy Futures, says individual investors should avoid trying to determine the lowest price to buy gold.
"The appropriate investment point comes with a very important phenomenon, which is, with the rise of our stock market, the gold price will rise as well. Under this circumstance, the global gold market will warm up with a stabilized economy. Thus, the gold price will further go up in accordance with a rise in other capital transactions. That's the point where the gold price touches down and rebounds. I think now it's still a bit early to invest in the gold market."
To echo the passion of gold financing product investors, China is about to introduce a night trade market. Currently the gold and silver trading time is Monday to Friday, 9 a.m. to 11:30 a.m. and 1:30 p.m. to 3 p.m. But officials at the Shanghai Futures Exchange said that they expect an additional 9 p.m. to 2:30 a.m. trading time to be added.
Yao Guang, general manager of Galaxy Futures, says the proposal to extend the trading hours for gold and silver contracts will help investors respond during the main trading hours of international markets as well as complete daytime settlements.
"If we don't have night trading, the gold market in China is just a market for China. Thus, there may be a transaction gap between our market and the American gold market, because we are asleep while trading is still going on overseas. So, once we start trading the next morning, we need to follow up on the price gap either by raising our price or lowering it. The night trading may make the Chinese gold market more connected with the international market."
Gold and silver prices are closely related to movements in the international market with the prices of spot gold and silver set during the night, Beijing time.
Officials at the Shanghai Futures Exchange said the move would improve pricing and risk management and be more in step with the global market to, in turn, help reduce investor risk.
For CRI, I am Li Dong.