Silver counterattack: Black swan picks up "pig on the vent"

Recently, precious metals have shown signs of fire. On Wednesday, international gold prices hit another two-year high, and silver rose for the sixth consecutive trading day, and stood at the $20 mark per ounce. In the domestic futures market, gold and silver futures are also very strong. The Shanghai gold main 1612 contract has approached 300 yuan/gram. The Shanghai 1616 contract has also risen nearly 1000 points from the beginning of June, and once rose to 4599 yuan/kg.
"Silver has long been laid out, and now wait for the profit!" Yesterday after the market, investor Mr. Feng said that he was profitable in this wave of silver futures gains, the most recent month's earnings as high as 30%.

Some people in the organization regard silver as the next "pig that takes off at the wind." So, how long does it last for silver after rising nearly 30%?

Real gold lost to silver

It is worth noting that this time, the "little brother" in the precious metal market counterattacks, and the light of silver has overshadowed gold. According to the statistics of China Securities Journal, since June 2, the international silver price has increased by 26.01% to US$20.13 from US$15.985 per ounce. The international gold price has only increased from US$1215.9 per ounce to US$1366.2 per ounce, an increase of only 12.43. %.

Why is true gold not rivalry to silver? In this regard, Shen Yuanchuan, a senior researcher at Shiyuan Jinxing, pointed out that the recent rise in silver has dominated the commodity market, and both volatility and trend have attracted global attention. The reason why silver has such a strong performance is mainly due to two reasons: from the internal point of view, it is the situation that the price of silver is relatively underestimated from the price ratio of gold and silver and its fundamentals; It is sought after by large institutional investors such as hedge funds.

From the perspective of fundamental logic, the risk aversion brought by the Black Swan event is the basic logic of the recent surge in the price of precious metals. Since the Brexit referendum was passed, the market expects the European Central Bank and the Bank of England to overweight to release liquidity in response to a possible economic crisis. The minutes of the Fed’s earlier announcement were a lot of use of the wording of “uncertainty”, which made the market more confused about the Fed’s next monetary policy rate hike, and the dovish is expected to rise further, from risk aversion and The anti-inflation property has formed a medium-term positive for the precious metals market. Not only that, but the gold and silver ratio data also shows that silver is relatively undervalued. Global safe-haven funds are more willing to buy silver than gold, which is the fundamental reason why silver is sought after.

From the trading face, after the Brexit, whether it is domestic Shanghai silver futures, or London spot silver and US COMEX silver futures have shown varying degrees of volume, which provides a large fluctuation in silver. The basis of liquidity. It is understood that large institutional investors such as hedge funds have invested heavily in buying in the COMEX futures silver market, and even some hedge funds have reached the order of 30 million to 40 million US dollars. In addition, the recent rise in silver ETF holdings and the close of the COMEX silver speculative net long position announced by the US Commodity Futures Trading Association (CFTC) have risen to historical highs, which is the reason for the surge in silver.

"The expectation of Brexit and its derivatives makes speculative shorts very fearful. The futures market is characterized by the lack of speculative short-selling power, and the industrial hedging is sold as the main force. Silver moves with gold, strongly supported by gold prices, and fears of short-selling power. At the time, short-term bullish speculative forces pushed up the price of silver. After successfully attracting the participation of hot money, it became a situation of more killing.” Everbright Futures precious metals analyst Dapeng said, but the silver fundamentals have not changed significantly, from the perspective of the disk. Futures have higher premiums in the distant month, and the explicit stocks have not seen a significant decline. The market has not experienced the phenomenon of out-of-stocks. It is not conducive to the trend of funds, but it is conducive to arbitrage.

South China Futures precious metals analyst Xue Na further pointed out that in addition to following gold, the recent shortage of COMEX silver stocks and supply gaps are also important drivers of price increases. Most of the silver mines are associated minerals of basic metals such as zinc, aluminum, lead and copper. Last year, the general price drop of metal caused the mines to lose money, which led to a decrease in production expectations. In addition, the domestic active production capacity increased the environmental cost, which led to the supply of basic metals and silver. The gap, which is the main reason for silver's recent rise in basic metals, is also an important reason why silver is stronger than gold.

Stock period chord reverberation

On the occasion of the long-term revelry of the futures market, the precious metals concept stocks in the A-share market are also frequently reported. In the five trading days from July 1, the non-ferrous metals index in the CITIC Tier 1 industry achieved a five-day increase, with a cumulative increase of 12.29%. Among them, Shandong Gold (600547, shares), Western Gold (601069, shares) and other stocks, are recent big bull stocks.

Historically, there is a considerable correlation between precious metal stocks and precious metal prices, and this correlation will increase as the industrial chain moves up, that is, the main business of related stocks is upstream in the entire precious metal industry chain. The greater the relevance. Shen Huichuan pointed out that in the short-term, when the precious metals show a mid-line bull market and the securities market lacks hot topics, the precious metals concept stocks will show a good upward trend and become a better choice for short-term investment. For the medium-term configuration, the current precious metal price is still not counted. High, there is still a considerable gap from historical high prices. In the current global economic outlook, the long-term trend of precious metals in the precious metals will help the precious metals concept stocks out of the strong pattern.

Zhan Dapeng also said that the current precious metals continue to rise, the valuation and expected profits of related listed companies are also increasing, and the interest in funds is significantly greater than that of some already high-profile stocks; while the gold concept stocks have risen and successfully attracted investors. Gold's attention, this is an upward positive feedback.

However, there are also people in the industry who are suspicious of the persistence of the stock market mapping. Wang Baolei, an analyst of Fubao Information Precious Metals, believes that for gold stocks, the more important thing is that the price of gold will increase the company's revenue. If it is only driven by short-term popularity, the rise in gold prices may not bring about a substantial increase in stocks.

Wang Fengwu, a senior gold analyst at Dongfang Jinyu (600086, shares) Co., Ltd., said that precious metals stocks should be divided into resource categories and sales stocks. The performance of resource stocks is in line with the price of precious metals, showing rising expectations; The stock performance was weak, indicating that the current market sales situation is average.

Selling gold to buy gold or arbitrage opportunities

In precious metal investment, the price ratio of gold and silver is the key to judging the market outlook. Zhan Dapeng pointed out that the gold-to-bank ratio can represent a part of risk appetite, that is, when the risk preference is reduced (bear market), gold performs better than silver, and the ratio of gold to silver rises; when risk preference heats up (bull market), silver tends to outperform gold. The ratio of gold to silver decreased.

From an empirical point of view, the price ratio of gold and silver in the past 100 years can be divided into three stages. The first stage is the era in which gold and silver are circulated as money, that is, from the 1930s to the 1960s; the second stage It is the era of the rise of the dollar, that is, the 1970s and 1980s; the third stage is the 1980s to the present. In the first two stages, the price of gold and silver has been fluctuating around 35, and the third stage of gold and silver prices fluctuated around 60.

Xue Na believes that the price of gold and silver usually fluctuates between 40 and 80, and has a certain regression characteristic around 60. Before that, the price has dropped from 80 or more. The current price is around 68. According to the previous law, it may continue on a longer period. The shock fell back. The recent rise in silver and base metals has come to an end, as price increases to a certain position will stimulate mineral producers to increase production. The main driver of gold's rise is risk aversion and the Fed is expected to postpone interest rate hikes. Therefore, this Friday's non-farm payrolls data is very important. If the performance is better, it may alleviate the market panic. If the performance is not good, it will seriously aggravate the panic. In general, gold may fluctuate or fall in the short term, but it is promising for a long time; silver also has a short-term gain in the short-term increase. Most of the short-term lightening may lead to a correction, and long-term optimism. In the short-term correction, silver may perform weaker. Selling silver to buy gold may have certain arbitrage opportunities.

(Editor: Li Xingwang HF015)

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