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Why is the trend of international gold prices unbeatable? //
On April 12, the spot price of London gold broke through the $2,400 mark during the European trading session, and as of press time, the spot price of London gold reached a maximum of $2,400.63 per ounce, and COMEX gold reached a maximum of $2,418.2 per ounce on the same day.
Industrial Securities said that even though the US economic data continues to exceed expectations, and even the Fed's interest rate cut expectations have gradually weakened, gold is still riding the dust. In essence, the core of this round of gold price rise reflects the hedging of the US dollar credit system, and the interest rate cut has boosted the gold price at a certain point in time, but just like in 2023, regardless of whether the Fed cuts interest rates or not, gold prices are still showing a central upward trend under the continuous gold purchases of global central banks, and the monetary attributes of gold dominate the long-term upward trend of gold prices.
Soochow Securities said that the bullish view on gold prices has not changed, but in the short term, gold prices will stand at $2,500 per ounce, and the key word is "inflation". Resilient U.S. inflation + a mildly rising commodity bull run (most importantly likely to be oil prices holding steady at $95 and touching $100). Of course, an unexpected recession or a head-on conflict between Israel and Iran can have short-term effects.
The agency further noted that the analysis of gold requires a clear distinction between medium- and long-term and short-term logic. The two most important medium- and long-term macroeconomic narratives may be the changes in the macro environment of deglobalization and high inflation after the pandemic, and the narrative of the challenge of the credit and monetary system. The result is an asymmetric "decoupling" of gold prices from US Treasuries and the US dollar, where US Treasury yields rise, the US dollar appreciates, and gold "does not fall", and gold may be more sensitive to inflation and commodities.
Ping An Securities believes that in the medium term, the first quarter of the gold price rose larger, the U.S. economy in the first quarter is still showing a certain resilience, March non-agricultural new and CPI data are beyond market expectations, interest rate cut expectations have been repeatedly postponed, if the Fed rate cut pace to a certain extent beyond expectations, may bring gold price fluctuations.
In the long run, the risk of U.S. sovereign debt is unresolved, the trend of de-globalization continues, overseas geopolitical issues ferment, superimposed on the 2024 global election, the global macro environment is still relatively complex, the US dollar credit system may continue to weaken, the global sovereign monetary system may undergo a long-term reconstruction process, and the gold anchor is expected to be reshaped.
How do you see the investment value of "gold stocks"? //
It is worth noting that on the same day, the A-share precious metals sector soared across the board, and the stock prices of many stocks hit new highs this year, with Zhongrun Resources, Chifeng Gold, Hunan Gold, Yintai Gold, Shandong Gold, and Zijin Mining rising 10%, 9.60%, 6.82%, 6.30%, 5.88%, and 2.22% respectively. Among them, the share prices of Zijin Mining and Yintai Gold hit record highs since their listings. Zijin Mining's turnover on the day was close to 4.3 billion yuan, the total market value of the latest A-shares reached 471.3 billion yuan, and the circulating market value of A-shares was 378 billion yuan.
The rise of the A-share precious metals sector is inseparable from the promotion of funds. Kaiyuan Securities said in the research report "Monitoring the Capital Behavior of the Gold Stock Sector" that the CSI Gold Industry Stock Index (932265. CSI) consists of 39 constituent stocks, and its business scope covers gold mining, smelting, sales and other fields. Gold Stock Index (932265. CSI) has risen strongly by 16.4% in the first quarter of 2023, and has recorded a gain of 38.4% so far as of April 10. Regarding the capital trend of the gold stock index, the agency pointed out that the real-time position of the public offering has risen rapidly to a historical high since New Year's Day; the northbound funds have increased their positions significantly after the Spring Festival; the financing balance has risen rapidly after the Spring Festival, and the securities lending and borrowing are at a low level.
How do you view the investment value of gold stocks at present? The volatility of gold stocks has been greater than that of gold for a long time, and there is a strong logical support for this phenomenon. Guojin Securities believes that the core value of gold stocks comes from factors such as resources, ore grade, production capacity, etc., and the stock price elasticity of gold stocks is not only due to the change in current profits brought by the rise in gold prices to listed companies, but more importantly, the exponential growth brought about by the increase in the value of the company's assets. As a more resilient target, gold stocks are more suitable to hold in an environment where the gold market is rising, especially when the market also meets the low overall valuation of gold stocks and is expected to be driven by the logic of gold.
Tianfeng Securities also has the same view, saying that the historical trend of gold stocks and gold prices converges, but the elasticity is higher. At the beginning of the current gold rally cycle, gold stocks are about 2.23 times more resilient than the gold price. The release time of gold corporate profits lags behind the performance of commodities, so there is a phased divergence between the performance of the equity market and the commodity market. However, as the price of gold continues to rise, the release of profits after the repair of gold equity balance sheets will be smoother.
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