ATFX foreign exchange science popularization： three data websites that must be known in gold trading
Source: Financial Network
ATFX foreign exchange science: to understand the fundamental trend of crude oil market, we need to pay attention to OPEC and EIA websites, where we can collect the required data; To understand the fundamental trend of the gold market, we need to pay attention to the three websites of world gold council, goldhub and LBMA, where we can also collect the required data. The World Gold Council is the leader of the gold market, and its members are the world’s leading gold mining companies. It describes the characteristics of gold as follows:
1. High liquidity and scarcity;
2. Safe haven in high-risk period;
3. The best choice for hedging risks;
4. Countering the devaluation of legal tender;
These four aspects can be said to include all the functions and attributes of gold. Incidentally, the official website of the World Gold Council is the only one among the well-known websites in the West that I know, which has the quick tools to reprint "Weibo" and "WeChat", so we can see that they attach importance to the China market.
▲ATFX for the picture
Goldhub website is actually a sub-website for storing all kinds of data collected by the Gold Association, and DataGOLDHUB, the menu option in the above picture, is its click entry. The data about the supply, demand and distribution of gold that we want to focus on today are all from the Goldhub website. The reason why the London Gold Market Association is not the key content is that it is not as rich as the World Gold Council, but the website still deserves the daily attention of traders. Next, we will focus on six aspects of gold:
1. The linkage performance of gold price and quotation with other assets.
In this section, we can see all the gold price data since 1970, but we need to register and log in to see the complete content. As China and India are important demand markets for physical gold, this section also introduces the difference between the physical gold prices in China and India and the international dollar gold prices. According to the latest data, the difference between China gold price and international price is $20.54 (discount), and Indian gold price is $2.53 (discount). In addition, this section also shows the quotation and trend curve of the gold futures market, as well as the performance and comparison of gold’s yield in the past year. For example, the yield of gold in the past year was 24.65%, while the yield of global bond market was only 9.20%, the MSCI stock index was 16.93%, and the yield of commodities other than gold was negative 3.08%. It can be seen that gold was the variety with the highest yield in the past year. Of course, if you want to query the daily volatility data of gold or the correlation coefficient between gold and other related investment products, you can find the answer in this section.
2. Gold liquidity
Liquidity usually refers to trading volume, and the greater the trading volume, the better the liquidity; The lower the trading volume, the worse the liquidity. The latest data shows that the daily trading volume of gold is $145.5 billion, which is at a high level. In this sector, you can also see the trading volume of other comparative markets, such as the daily trading volume of corporate bonds in the United States of America is 33.9 billion US dollars, the daily trading volume of gilt bonds in the United Kingdom is 44 billion US dollars, the daily trading volume of S&P 500 is 149.17 billion US dollars, and the trading volume of bonds with one to three years in the United States is 149.68 billion US dollars.
3. Supply and demand
The content of this plate is huge, and it is difficult to summarize it in detail through an article. Here we introduce the key gold supply and demand, and traders interested in the rest of the data can consult the website themselves.
▲ATFX for the picture
It can be seen that there are four main aspects that constitute the demand for gold:
1. Jewelry
2. Technical manufacturing
3. Investment demand
4. Central Bank
Taking the data of 2019 as an example, the jewelry industry consumed 2,122.9 tons of gold, ranking first; Secondly, the investment market consumed 1269.5 tons of gold, ranking second; Once again, the central bank’s gold demand is 668.5 tons, ranking third; The demand for gold in technological manufacturing is the lowest, at 326 tons.
Look at the supply of gold:
▲ATFX for the picture
It can be seen that the supply of gold consists of three aspects: mining, recycling of waste gold and hedging by manufacturers. Among them, the proportion of manufacturer hedging is polar, only -0.7 tons in 2019, so it is directly ignored. In 2019, the total amount of gold mining was 3,530 tons, which was higher than the demand of the jewelry market; The circulating gold is 1281.3 tons, which is higher than the consumption in the investment market.
4. Gold holders and trends
Gold is a physical asset that is highly valued by central banks all over the world, so gold accounts for a large proportion in the central bank reserves of all countries. Many times, the change of the central bank’s total holdings of gold determines the important trend direction of the dollar gold market in the coming year.
▲ATFX for the picture
Looking closely at the above chart, we can see that we have not added the gold holding trend of the Federal Reserve. It is not because the Fed’s gold holdings are not worth mentioning, but because its gold holdings are too large. If it is added to the chart, the trend of other countries will be completely submerged. Here we can explain that the latest gold holdings of the Federal Reserve are 8,133.46 tons, which is much higher than the scale of Russia’s 2,298.65 tons ranked first in the above picture. Although China and India are big consumers of physical gold, their central banks hold only 1,948 tons and 688 tons of gold, which is quite small compared with the United States and Russia.
5. Long-term driving factors of gold
The long-term driving factors of gold come from main categories, including economic expansion, market risk, opportunity cost and trend intensity. There are four main factors that determine the price of gold:
1. Wealth and economic expansion;
2. Market risk and uncertainty;
3. Opportunity cost;
4. Trend strength.
The first two factors play a particularly important role in the long-term performance of gold and form strategic reasons for buying and investing in gold. There is a positive relationship between gold price and economic growth, because gold demand exists in the form of jewelry, technology and long-term savings. This is especially true in developing economies, where gold is often used as a luxury and a means to preserve wealth. Market risk and uncertainty are also related to the long-term performance of gold. Many investors regard gold as the ultimate safe haven-it can effectively hedge against currency depreciation, high inflation and other systemic risks. In addition, other macroeconomic variables, such as interest rates, may increase or decrease the relative cost of holding gold. Price momentum and similar trend variables can further enhance or reduce the performance direction of gold.
6. Short-term driving factors of gold
The short-term here is only the price change of gold in the last month, not the minute and hour level that short-term traders think. In this section, the World Gold Council gives its own short-term driving model of gold, which contains the percentage of influence of various factors on the gold trend. The model in December 2020 shows that economic expansion has contributed 0.26% to the trend of gold; Risk aversion contributed 3.25%; The influence of walking power contributed 2.5%, and we don’t describe the influence of other factors one by one. Interested traders can log in to the World Gold Council official website to check.
ATFX disclaimer:
1. The above analysis only represents the opinion of analysts, and the foreign exchange market is risky, so investment should be cautious.
2. ATFX will not be responsible for any profit or loss that may be caused by using or relying on this information directly or indirectly.
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