Abstract: Spot gold fell sharply after hitting a record high of US$1981.11 per ounce, and once fell to 190.

Spot gold fell sharply after hitting a record high of US$1981.11 per ounce, once falling to US$1906.7 per ounce, and then rebounded sharply, currently at US$1951.86 per ounce. Spot silver also broke through the psychological resistance of US$25/oz, hitting US$26.19/oz, and then fell back to US$24.24/oz.

On the occasion of today's rebound, the Conference Board announced that the consumer confidence index fell from 98.3 to 92.6 in June. At the same time, the U.S. dollar stabilized after a sharp decline this month, and investors awaited the outcome of the Fed’s policy meeting on Wednesday.

Jason Rotman, director of Everplus Capital, said in an email comment: “It can be said that the epic gold price rise continues.” “The demand for gold as a safe haven for central bank policy has increased, and I still believe that under current conditions, 2200 The US dollar/ounce is my next target price.” “However, any investment argument has opposites. If the price of gold does not reach US$2,200/ounce, the upward momentum brought by the epidemic will change dramatically, and the gross domestic product (GDP) ) May really be higher than expected," he said. "Therefore, there is still a long way to go to reach this point."

The price of silver has also continued to rise. In this regard, Rotman said: "The rise in silver prices is both a technical correction and a buying order, because with the expansion of technological fundamentals, the industrial application of silver may become more common."

At the same time, the U.S. dollar is generally weak. Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a recent report that “the U.S. real rate of return is low to negative, inflationary pressure is rising, the possibility of global stagflation, and The turbulent market environment is still supporting gold prices in the medium and long term. "However, the rapid rise in gold prices also increases the risk of rapid profit settlement and sharp downward correction," she pointed out that the price of gold has risen by more than $500 since March /ounce. "There is proper room for callback."

The Fed also started a two-day interest rate meeting on Tuesday, and the $1 trillion economic stimulus plan launched by Republican senators has increased concerns about monetary financing of government spending. This will lead to the possibility that the US 4 trillion dollar stimulus plan may increase by at least 1 trillion US dollars, and may also add nearly 2 trillion US dollars of additional stimulus measures before it is fully concluded. Unlike the TARP (non-performing asset) rescue only through the banking system in 2009, a large part of the rescue funds went directly to the pockets of American consumers. It is not spent on repurchasing stocks, but on actual goods and services. Once the threat of the virus has passed, the possibility of price increases increases substantially. The sooner the global economy recovers, the more likely this stimulus will lead to inflation.

On the supply side, the US Mint stated that it is slowing down the production of gold and silver coins and restricting supply to authorized distributors. This sign shows that the epidemic is hampering the physical money supply in the United States. According to reports, the West Point factory in New York is taking measures to prevent the virus from spreading among its employees, which may slow down the mint's coin production in the next 12 to 18 months. Due to the reduction of staff during the epidemic, the bureau’s factory in West Point cannot produce gold and silver coins at the same time, and can only produce one type of coin. West Point's gold coin production base and San Francisco's gold coin production base are one of the main gold coin production bases. After the San Francisco gold bar production base closed earlier this year, production was only partially resumed in May this year. According to the most recent annual report of the United States Mint, in fiscal year 2019, the company produced a total of 18.8 million ounces of gold.