Chinese speculators and the gold price rally

March and April saw a gold rush, driven mainly by futures traders on the Chinese Shanghai Futures Exchange (SHFE) and the Shanghai Gold Exchange (SGE). The trading volume in SHFE gold futures rose by around 400%. Chinese traders and investors have therefore fueled the gold market. Americans, on the other hand, have sold gold-related assets in the last three years. This was due to high real interest rates on the one hand and a high level of financial complacency on the other.

The ten-year US real interest rate, i.e. the inflation-adjusted interest rate, is close to a 20-year high. This is driving investors into assets such as bonds, funds and savings accounts. At the same time, non-yielding assets such as precious metals, for which there is no interest, are readily sold. If, on the other hand, real interest rates are low or negative, precious metals become more attractive. Gold is known in the USA as a "fear investment". This is why demand increases during financial crises or recessions. China’s economy is now in crisis, just think of the crash of the Chinese real estate market. And interest rates in China are low, which is good for the demand for gold there. With the weakness in the stock and real estate markets, the Chinese, including small investors, have turned to gold.

Interest waned in mid-April, the gold price was high and the SHFE and SGE set daily price limits. Interest in gold and a price increase similar to that seen in March and April could now return with Chinese gold futures traders as the driving force. China’s continued weakening economy should ensure strong demand for gold in the coming years. China and India could recognize that prices are high, but are not likely to fall, but rather continue to rise. Gold companies such as Aurania Resources or GoldMining should therefore be in high demand.

Aurania Resourceshttps://www.commodity-tv.com/ondemand/companies/profil/aurania-resources-ltd/ – focuses on copper and precious metals in South America. The flagship project is located in the Andes in Peru. Visible gold has also already been discovered.

GoldMining’shttps://www.commodity-tv.com/ondemand/companies/profil/goldmining-inc/ – properties are located in North and South America and contain gold and copper. There are also shares in Gold Royalty, U.S. GoldMining and NevGold.

Current company information and press releases from Aurania Resources (- https://www.resource-capital.ch/en/companies/aurania-resources-ltd/ -) and GoldMining (- https://www.resource-capital.ch/en/companies/goldmining-inc/ -).

In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.

Disclaimer: The information provided does not represent any form of recommendation or advice. Express reference is made to the risks in securities trading. No liability can be accepted for any damage arising from the use of this blog. I would like to point out that shares and especially warrant investments are always associated with risk. The total loss of the invested capital cannot be excluded. All information and sources are carefully researched. However, no guarantee is given for the correctness of all contents. Despite the greatest care, I expressly reserve the right to make errors, especially with regard to figures and prices. The information contained herein is taken from sources believed to be reliable, but in no way claims to be accurate or complete. Due to court decisions, the contents of linked external sites are also co-responsible (e.g. Landgericht Hamburg, in the decision of 12.05.1998 – 312 O 85/98), as long as there is no explicit dissociation from them. Despite careful control of the content, I do not assume liability for the content of linked external pages. The respective operators are exclusively responsible for their content. The disclaimer of Swiss Resource Capital AG also applies: https://www.resource-capital.ch/en/disclaimer/

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