Gold is experiencing an unprecedented "black storm".

Without warningBestp2ecryptogames2022The price of gold suddenly met Waterloo! It recorded the biggest one-day decline in nearly two years and shocked global financial markets.

Spot gold in London fell 2% on April 22.Bestp2ecryptogames2022.72%, at 2326Bestp2ecryptogames2022.810 US dollars / oz. In intraday trading, spot gold plunged more than 60 US dollars / oz, falling below multiple round marks in a row.

With no sign of further escalation of the conflict between Israel and Iran in the Middle East, risk aversion has cooled significantly, and US bond yields have rebounded sharply recently, coupled with widespread expectations that the Fed will postpone interest rate cuts.

The reason for the rare collapse of gold has been exposed!

Investors began to reassess the value of risk aversion.

The reasons for the rare plunge in gold prices on the 22nd were exposed! First of all, the fluctuation of gold price is not an isolated event, but is closely related to the global economic situation, geopolitical risk, monetary policy and other factors.

Before the collapse in gold prices, the international gold price has been rising for some time, reaching an all-time high. However, with the gradual recovery of the global economy and rising inflation expectations, investors began to reassess the safe-haven value of gold.

In addition, geopolitical tensions in the Middle East eased, risk aversion in the gold market began to cool, and capital investment demand for gold naturally declined. The mitigation of geopolitical risks has also had an impact on the price of gold. This has cooled the risk aversion in the market and reduced the investment demand for gold.

Bank of America also said in a report on the 22nd that the tension between the Middle East and its stock marketBestp2ecryptogames2022The direct impact of his asset class may not be as direct as it seems in the past two weeks.

In addition, the Fed's monetary policy is also one of the important factors affecting the price of gold. Recently, the expectation of the Fed's interest rate cut is uncertain, and the repeated extension of the Fed's interest rate cut has also begun to make the market impatient.

In addition, the demand for profit-taking in the gold market is obviously heating up, and after the sharp rise, some funds have chosen to reduce their holdings, increasing the selling pressure on gold.

The volatility of gold prices also reflects the complexity and uncertainty of the global economy. In today's era of global economic integration, the economic policy adjustment of any country may have an impact on the global financial market.

Sell positions to lock in profits

Gold may enter a period of consolidation.

UBS said in a report last week that while some investors were concerned that the profit-taking period was too early, market participants might eventually be inclined to sell some of their positions in order to lock in profits, given the sharp rise in gold prices. UBS expects gold to enter a period of consolidation unless geopolitical risks escalate.

Galaxy Securities said that historically, escalating conflicts in the Middle East tend to push up inflation expectations as well as heightened risk aversion or gold prices as a result of higher oil prices. Although from the traditional gold price research framework, the influence of war conflict on gold pricing is short-term, and it is still weaker than the real interest rate in the medium term. However, the large-scale conflicts in Russia, Ukraine, the Middle East and other key regions of the world since 2022 may indicate that the global political and economic landscape behind them is changing, or from a long-term dimension, as in 1970-1980 and 2001-2011, the key factors driving the current round of gold prices into the third decade cycle of history.

To sum up, the collapse of gold price is not an accident, but the result of a variety of factors. Although the status of gold as a safe haven asset is still unshakable, investors also need to be more cautious and rational when allocating gold. We need to pay close attention to the changes in the global economic situation, geopolitical risks and monetary policy in order to better grasp the investment opportunities and risks in the gold market.