The Son of Finance of the Great Age

  Chapter 749 The Battle of Gold (2)

  Gold is one of the rarest, most expensive, and most valued metals in the world. Currency is naturally gold and silver. Due to its advantages of small size, high value, easy division, uniform quality, non-perishable, and long-term storage, gold and silver used to be common currency in human society before the emergence of legal paper money. Even today, when banknotes are highly developed, gold still has its unique value-preserving function. For example, the US dollar, which has good credit all over the world, can be widely recognized, to a large extent, because the United States has huge gold reserves.

  Although gold has lost its payment function with the emergence of banknotes, its intrinsic value still exists and is widely recognized. Therefore, in its production, circulation, sales and other links, there are a lot of resources and capital investment. In terms of the pricing power of gold, the superpowers have also engaged in fierce competition, and then the two exchanges/associations, COMEX in the United States and LBMA in the United Kingdom, won the final victory.

  COMEX, New York Mercantile Exchange, formerly NYMEX, changed to its current name after being acquired by Chicago Exchange CME. This is a super exchange, with energy and rare metals as the main targets, and dominates the prices of electricity, natural gas, crude oil, gasoline, fuel oil, coal and other energy around the world. Of course, it also dominates the prices of precious metals such as gold, silver, and platinum around the world.

   After the collapse of the Bretton Woods system, the dollar and gold were decoupled. Under such circumstances, Americans realize that they need to hedge their gold and increase investment value. Under such circumstances, they turn their attention to the futures market, so the gold futures of COMEX develop rapidly. Within a year, it surpassed London and Switzerland to become the world's largest gold futures market by trading volume. Since then, the pricing power of gold has been firmly controlled by Americans.

  COMEX gold futures, each contract is calculated on the basis of 100 ounces, the quotation unit is USD/oz, and the purity of the underlying gold is not less than 99.5%. The minimum unit of change is US$0.10 per ounce, that is, US$10 per lot. The trading months are the spot month, the next two months, February, April, June, August, and October within two years, and June and December within five years.

In other words, if it is January 2010, there are 1001, 1002, 1003, 1004, 1006, 1008, 1010, 1012, 1102, 1104, 1106 and other gold futures contracts in the COMEX market for a total of 21 months. . Of course, the last three months have been the most heavily traded and speculative. The farther the months are apart, the smaller the trading volume, and the more obvious the meaning of hedging.

  In the current COMEX gold market, a wave of quotations is brewing.

  Since the first signs of the subprime mortgage crisis in 2007, the price of gold futures has increased from the original level of 670 US dollars per ounce, because the risk aversion sentiment in the market has begun to ferment. In March 2008, Bear Stearns reached a peak when it was acquired, and the price of $1,036 an ounce hit a new high in history. Then, stimulated by the news that the governments of various countries rescued the market one after another, gold futures started a sharp correction. In October 2008, when major U.S. financial institutions were rescued, the price of gold futures reached its lowest level for that period, at $684 an ounce.

  Then the economic crisis caused by the financial crisis began to emerge, various economic data in the United States began to decline, and the price of gold rose again, once again rising to a height of 1,007 US dollars. After that, because the U.S. economy began to stabilize, the depression is no longer something people panic about, but recovery is far from impossible. Therefore, in this case, the price of gold also tends to be flat and no longer fluctuates violently. Until September 2009, the price of gold futures fluctuated around $1,000.

  Starting from September, the small team of Zhong Shi and others began to strongly intervene in the gold futures market. As a result of the crazy sweeps, the price of gold futures once jumped to around US$1,050. Then they realized that this method of fighting each other would only increase costs, so they strengthened communication with each other. Finally, at the end of October, the team completed building positions and suppressed the price of gold futures at around $1,025 .

  After the completion of the suction, they began to gradually increase the price of gold futures. Because during this period of time, the economic data around the world is not very good, and the impact of the economic crisis is far more serious than they imagined. So to some extent, the price of gold is guaranteed, coupled with the deliberate actions of speculative funds, so in just two months, the price of gold futures was pulled up to 1227 US dollars, that is, at The day when Greece's national debt was downgraded reached its peak during this period.

  Greece was downgraded and the euro depreciated, replaced by a strong rise of the dollar. This limits the further development of gold prices to a certain extent, because as a substitute commodity for gold, the trend of the US dollar is negatively correlated with the price of gold to a certain extent. That is, when the dollar depreciates, the price of gold rises; conversely, when the dollar appreciates, the price of gold falls.

  So before the euro zone announced the rescue of Greece, the price of gold experienced a structural correction, falling from the highest point of $1,227 to the recent lowest of $1,076.

  …

   "The price of gold is going to pull back again!"

  Collen Stilson looked at the Bloomberg terminal and said thoughtfully.

  This is the City of London, a commodity fund company called KS&JR, whose main investment targets are gold and silver.

  Collen Smithson, as the named founder of this fund, has more than ten years of rich investment experience in the gold market. Although KS&JR only manages a fund size of 80 million pounds so far, the annual return rate of this fund still exceeds 10%. This is a fund company known for its prudent investment.

  Forty-year-old Collen Smithen, in the prime of life, has a charming blond hair, coupled with a chiseled silhouette, and maintains a good body shape due to years of exercise, a full image of a middle-aged handsome guy. However, although his image may attract the attention of others in a bar, it has no effect in the financial market. After all, the financial market is based on the size of funds.

   "Guys, what do you think about this?"

  In the office, he started a routine weekly meeting. Around him, there are five analysts sitting, this is his team.

  KS&JR has a fine tradition, that is, brainstorming meetings are held every week, month, and quarter to discuss past gains and losses and prospects for the future. At this meeting, everyone can speak freely and express their views on the market.

   "The Greek debt crisis broke out without any clues. This is really beyond our expectations!"

A tall, thin analyst took up the conversation and said, "In this case, we lost a lot of money on the position, and basically swallowed the profit of the previous short position. This is something that none of us have What I think of can be attributed to the black swan incident."

  His name is Jack Mullen, and he is an excellent gold analyst. But because of the problem of the structure, he didn't realize the situation behind the Greek debt crisis at all.

   "Jack, tell me what's on your mind!"

Collen Smithon continued to ask, noncommittal, "Basically, we can conclude that in the past week, the most important factor affecting the gold market was the trend of the US dollar. But after the euro zone decided to bail out Greece, the US dollar was basically There is no need to think about it anymore. So what is your opinion on our follow-up operations?"

   "Keep going long!"

Jack Mullen said without hesitation, "The finance ministers in the euro zone have reached an agreement and believe that this matter should be resolved quickly. Once the political risks no longer exist, the trend of the US dollar and the US economy will last at least half a year. Under the premise of the depreciation of the dollar, I think the capital of the world, including American capital, still tends to invest in conservative and safe-haven investments. Of course, gold is their first choice.”

   "Political risk no longer exists?"

Another analyst obviously disapproved of Jack Mullen's statement, and kept shaking his head, "We still don't have a clear understanding of the decision-making mechanism in the euro area. This is our shortcoming, but it is also It’s because we don’t pay much attention to politics, so we usually ignore these details. But this is also a very simple reason. If you are the finance minister of these countries, then if you use part of your country’s fiscal expenditure to save a country like Greece country, do you think there will be an agreement in the short term?"

   This analyst is Williams Roger, an analyst of Indian descent. He has curly hair, wears a pair of gold-rimmed glasses, has dark skin, is not very articulate, and always speaks English with an Indian accent. On weekdays, his accent is the object of ridicule. But when it comes to critical times, some of his opinions are quite convincing.

"this…"

  Jack Mullen wanted to refute it immediately, but he hesitated the next moment, because he realized that, according to what Williams Roger said, he might have to rethink the euro zone's decision to rescue Greece.

   "We have time to study this!"

Williams Roger continued, "But after the euro zone announced the rescue of Greece, the situation in Greece will definitely ease, it's just a matter of time. But gentlemen, have you ever thought that there may still be Will there be a second, or even a third Greece?"

"Ha ha…"

  It was completely different from the previous reaction, and everyone else laughed. Of course, this was not a malicious ridicule.

   "Roger, there are some things you don't know!"

Collen Smith said with a smile, "Maybe it's because you haven't read through the history of Europe, especially the history of Europe after World War II. At least in our opinion, the crisis in Greece is both a coincidence and a inevitable."

   "How do you say that?"

   Maybe a little ashamed, but because of his dark skin, others didn't see it. Williams Roger collected himself, and asked suspiciously, "Collen, I am very puzzled by what you say!"

   "This is the case!"

Collen Stison continued to explain, "After the Second World War, various countries in Europe entered a period of repair and construction. But Greece continued to fight, and they did not end the war until the 1960s. In politics In fact, their situation is far behind compared with other countries. This is the first special situation. The second special situation is that the economic policy of this country is contrary to that of most European countries. When we carry out large-scale privatization During the period of marketization and marketization, they chose to implement the socialist system and carry out large-scale nationalization. We all know that the economic vitality under this model will not be very good, and this is an obvious result.”

   "Finally, this country has always had a precedent of default. In other words, this country's credit is not very good!"

Collen Smithen shook his head and said with a wry smile, "If there is no guarantee of economic growth and the Eurozone, I believe it will be difficult for this country to attract many investors. Now the economic growth in the entire Eurozone is slowing down, and the total Under the circumstances that may remain unchanged, it is inevitable that their debt crisis will erupt, but it is just a coincidence in timing."

   "Yes, that's the truth!"

  Others also nodded in agreement.

   “So the rest of the Eurozone won’t be in debt crisis?”

  Williams Roger continued to ask, "Will the impact of the economic crisis really not cause problems in other countries?"

   "I can't guarantee this!"

Collen Smithen shook his head, "However, according to the current situation, I can judge that there will be no second Greece in the Eurozone, at least within half a year. Although some countries have high debts , but not as ridiculously high as in Greece. So we're safe so far."

   “I always have a feeling that Greece’s debt crisis is man-made!”

   After a long silence, Williams Roger took out a newspaper and gently put it in front of him, "Gentlemen, this is the "Daily Newspaper" with the largest circulation in Greece. Guess what I saw?"

  Under the puzzled eyes of everyone, he said word by word: "Zhongshi! When the Greek crisis broke out, he happened to be in Greece, and he was interviewed!"

   As soon as the words came out, all four people were shocked.

  Everyone's eyes widened, staring at the crumpled newspaper.

   Thanks to book friends Shen Yangrong, Xiao Shuili, Nanquan 99, and apo11o for voting monthly! Thanks to book friend Xiao Qi for another reward for the miracle of civilization! Continue to work hard and update, and look forward to good results in the new year. Everyone's support has given the author more motivation, thank you very much!

  (end of this chapter)