Central banks around the world are accelerating gold purchases, with a promising

Recently, gold and silver ETFs have been all the rage, with everyone talking about "stocking up on gold and silver." We need to delve into the story behind this craze.

The ETF craze is sweeping the world

Take a look, the world's largest gold ETF fund (SPDR) has been accumulating quite a bit of gold. Since the end of June, it has added nearly 33.7 tons of gold, with an increase of almost 4.1%. Silver is not far behind, with the SLV fund's silver holdings soaring by 901.4 tons, with an increase nearing 7%. This growth rate is faster than our grandchildren growing up!

Looking at our domestic market, there are quite a few new faces among the well-known gold ETFs. Le Xi Private Equity has quietly become one of the top ten holders of Hua An, Yi Fang Da, and Bo Shi's gold ETFs, without even a trace at the end of last year. And those individual investors are also eager, with names like Sha Hai Fei, Zhu Jiang Lun, He Qing Xiu, Wang Yi Wen, and Li Hong... each name shining on the ETF holder list, their investment enthusiasm is even higher than our enthusiasm for square dancing!

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The "small moves" of foreign giants

However, with every entry, there is an exit. Foreign giants have been busy selling gold ETF shares in the first half of the year. Big names like Bridgewater Fund and Barclays Bank have chosen to take profits. Behind this, is it their keen grasp of market trends, or do they have other plans? We outsiders can only guess.

Market fluctuations, gold and silver prices show their prowess

Speaking of the market, it's been a roller coaster ride. The COMEX gold futures price has soared from $2350 per ounce at the end of June to a high of $2570 per ounce, which is quite aggressive. On the other hand, silver has been much more calm, hovering between $28.5 and $30 per ounce, as leisurely as taking a walk in the park.

Bullish optimism, future trends are supported

Liu Xufeng, an analyst at Qi Sheng Futures, said that the increase in ETF holdings and the increase in CFTC gold speculative net positions are signs that bulls are optimistic about the future trend of gold. It seems that the precious metals train will continue to move forward.Pu Zulin, an analyst at Zhengxin Futures, has provided us with an analysis from a macroeconomic perspective. He stated that since June, the US economic data has been less impressive, leading financial markets to worry about a potential US economic recession and Federal Reserve interest rate cuts. Consequently, capital has been withdrawn from risk assets such as stocks and commodities, and has flowed into safe-haven assets like precious metals and US Treasuries. As the yield spread between Chinese and US bonds narrows, the Chinese yuan has appreciated against the US dollar, making precious metals priced in yuan less attractive.

Liu Xuefeng also warned us that a Federal Reserve rate cut in September is highly probable, but if the US economy weakens more than expected, the Fed might intensify the rate cuts, for instance, by shifting from a 25 basis point reduction to a 75 basis point reduction, or even consecutive cuts. This would be a significant positive for precious metals.

However, Wu Zijie, an analyst at Jinrui Futures, also poured some cold water on our optimism. He said that the current gold price is already in a relatively high valuation range, and the upward momentum may weaken in the short term. This is because the market has fully anticipated the Fed's rate cut actions, and the US economy still has some resilience, with the probability of a recession in the short term being low. Therefore, institutions might choose to reduce some of their gold positions at higher levels.

The strength of the yuan exchange rate also puts pressure on the domestic gold price. Although the international gold price is still reaching new highs, domestic gold can only find balance in fluctuations.

But don't be disheartened, friends, because in the medium to long term, precious metals, especially gold, are still worth our anticipation. Factors such as global currency over-issuance, devaluation of fiat currency, inflationary pressures brought about by anti-globalization, and intensifying geopolitical conflicts will all make the safe-haven value of gold more prominent. Central banks around the world are also accelerating the allocation of gold, and the proportion of gold in central bank foreign exchange reserves will further increase in the coming years.

Analyst Pu Zulin also expressed his optimistic attitude towards the future of precious metals. He believes that factors such as the transformation of China's new and old economic drivers, excess household savings, declining investment returns, and loose monetary policy will drive capital to seek safer and higher-yielding assets. Precious metals, as natural currencies, provide long-term upward momentum due to their monetary attributes. Additionally, the existence of uncertainties such as the US elections will also affect market risk preferences.

So, my friends, let's be at ease. Although gold and silver may fluctuate in the short term, they are still "hard currencies" worth holding in the medium to long term!