How to allocate commodity assets under the COVID-19 ?

How to allocate commodity assets under the COVID-19 

 

Looking ahead, gold still has sufficient upside momentum after a short break

Gold assets have obvious advantages

In addition to the above characteristics, gold assets are also regarded as a special commodity because of their currency attributes and risk aversion. Affected by the epidemic, the financial market has been greatly turbulent since this year, and only the gold market has the best view among commodities. As of June 12, London Gold rose from US$1517.18 per ounce at the beginning of the year to US$1729.65 per ounce, an increase of 14%, which once reached a new high in 7 and a half years.

The rise in the price of gold has its own unique logic. Under the risk aversion logic, risk events or panic may trigger a short-term increase in the price of gold.

We need using crucible to casting it ......

Since the global pandemic of the New Coronary Pneumonia epidemic, the number of diagnoses and deaths has soared, while vaccines and specific drugs have not yet been released. The "panic index" VIX has the largest increase of 288.53%, and the surge in risk aversion has made gold the darling of the large class of assets. However, the support effect of the hedging function on the gold price often occurs in the early stage of the risk event, and the action time is shorter.

Under the logic of hedging, the upward trend of inflation exceeds the nominal interest rate change or the real interest rate is lower, which can bring gold to the trend of the long-term market.

 

 



Post time: Jun-22-2020

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