Bank wealth management fancy "nuggets", the future gold price is easy to rise and difficult to fall

The continuous rise in international gold prices has made gold a bright investment, and wealth management companies have also joined the ranks of "gold nuggets".

The first financial reporter noticed that a number of wealth management companies have deployed gold, mostly based on bond assets, and at the same time allocated financial derivatives such as Au9999 of the Shanghai Gold Exchange, gold ETFs, and over-the-counter options linked to gold. Industry insiders believe that wealth management companies have launched gold-linked wealth management products to obtain the bottom income of the bond market, and can obtain blessing income when the price of gold rises, but there are also certain restrictions. Gold prices have been strong during the year, and may be prone to rise and fall in the future.

Bank wealth management layout gold

On April 19, the international gold price once climbed to $2,400 per ounce, and after a slight pullback in the early stage, the price rebounded again. Since the beginning of this year, the cumulative increase in gold prices has reached 15.96%, which is about to catch up with the cumulative increase of 17% in the first half of 2020.

The reporter noticed that many wealth management companies have launched gold-linked wealth management products, and many joint-stock banks or wealth management companies under city commercial banks such as CMB Wealth Management, Everbright Wealth Management, IB Wealth Management, Ping An Wealth Management, and Beijing Bank Wealth Management have taken the lead in layout.

CMB Wealth Management has a total of 16 wealth management products linked to gold, with the upper limit of the performance comparison standard of about 3%, and a few products reaching 5%, most of which are closed-ended, with a time period ranging from 3 months to 1 year. Taking "Zhaorui Target Yingwen Gold No. 3" as an example, this product is mainly based on strategies such as gold and quantitative neutral, and the benchmark of product performance is 2.6%~4.5% annualized interest rate.

Another series of wealth management products of "Zhaorui Focus Linkage Stable Gold Binary Bullishness" is linked to the Shanghai Gold Exchange spot SGE gold 9999. Ping An Wealth Management issued a product of "New Anxin Gold Star No. 1 Six-Month Closure", with a performance benchmark in the range of 2%~4%, and the product is also associated with the Shanghai Gold Exchange spot SGE gold 9999, with an embedded structure of two-way shark fins, which is suitable for investors with R2 risk level.

Beijing Bank Wealth Management launched the "Profit No. 1" wealth management product earlier, which is a "fixed income + gold" portfolio, which allocates part of gold on the basis of fixed income assets. Judging from the disclosure of the underlying assets, the product obtains the bottom coupon income with no less than 80% of the fixed income assets, and allocates gold-linked ETF funds according to the 15% pivot.

There are also wealth management companies that have launched gold wealth management products linked to gold ETFs and gold funds. The "Ruili Xingcheng Jinchen 6-month Holding Period No. 1" wealth management product issued by IB Wealth Management is mainly invested in debt assets, and at the same time allocates a certain proportion of gold assets, and selects gold ETFs, gold-themed funds and other targets.

In addition, some institutions have launched wealth management products linked to overseas gold assets, such as UBS Overseas Wealth Management Win-Win Notes, linked to SPDR Gold Trust, and QDII BlackRock World Gold Fund.

On the whole, the gold-linked wealth management products launched by financial institutions are mainly characterized by stability, and there are two main types, one is the "fixed income + gold" wealth management products, which use traditional bond assets as the base assets to obtain relatively stable coupon income, and gold assets account for 10%~20% of the range, as a blessing for income. In terms of investment period, most of them are in the range of 3 months ~ 1 year, and a few have 3 years, and most of them are closed.

"The reason for the recent frequent issuance of gold-linked wealth management products and structured deposits by bank wealth management companies is mainly due to the fact that gold prices have hit new highs since the beginning of this year. Zhou Maohua, an analyst at the financial market department of Everbright Bank, believes that the record high gold price has made the market more enthusiastic about investment and more likely to attract investors' attention.

Industry insiders interviewed by reporters believe that wealth management products are linked to gold assets and have corresponding advantages. Qu Ying, a researcher at Puyi Standard, pointed out that compared with directly buying physical gold or participating in gold futures trading, the investment threshold for gold-linked wealth management products is usually lower, so that more investors can participate in it.

However, some people in the industry believe that gold-linked wealth management products involve a variety of assets at the same time, and their final income still depends on the overall performance of the portfolio assets. At the same time, the closed-end investment period set by wealth management products may affect investors' redemption.

Gold prices are prone to rise and fall

After the international gold price soared from above $2,000 per ounce at the beginning of the year to $2,400 per ounce, Goldman Sachs raised its forecast for gold prices to $2,700 per ounce by the end of this year. This is the fourth time this year that the agency has revised its future price forecast for gold.

For a long time, the main pricing anchor of the international gold price has been the real interest rate of U.S. Treasury bonds and the U.S. dollar index, which belong to the "seesaw" relationship between the two and the other. "Since the beginning of this year, gold prices have continued to strengthen, and with the strengthening of the dollar index, the original gold pricing logic seems to be somewhat unworkable. A public fund precious metals investment consultant told reporters.

Yi Xiang, chief macroeconomist of Huatai Securities, believes that the recent trend of gold prices once again proves that in the current global macro trend and geopolitical environment, whether it is rising growth uncertainty or growth exceeding expectations, gold has not been affected by the actual impact of higher real interest rates. She pointed out that real interest rates are at historically high levels, and the price of gold, which is often negatively correlated with real interest rates, has not been affected by the rise in real interest rates from below -1% to above +2%, and at least no longer faces "headwinds".

Central banks' build-up of gold reserves is seen as another factor contributing to the firmness of gold prices. According to data given by Galaxy Securities, the amount of gold increased by global central banks in 2023 is the second highest on record, only slightly lower than in 2022. Global official gold reserves increased by 39t in January 2024, more than double the amount in December 2023, and global central banks have achieved a net increase in gold holdings for eight consecutive months.

"The rally in gold was closely linked to central bank holdings and retail purchases in the market. The aforementioned analysts said that under the situation of higher US dollar index and US Treasury yields, gold has not risen as before, indicating that the market's trust in the safety of the US dollar and US Treasury bonds has decreased.

Wang Yanqing, chief researcher of precious metals at China Securities Construction Investment Futures, believes that in the long run, the U.S. monetary policy is the trend of the times from tight to loose, superimposed on geopolitical risks, central banks are continuing to increase their holdings of gold, "gold will still be easy to rise and fall in the future."

Wang Qi, an analyst in the non-ferrous metals industry at Guosheng Securities, pointed out in the report that the short-term gold price pivot remained upward elastic, and the market waited for the Federal Reserve to have a more certain monetary policy turning signal or substantive landing. In the medium and long term, the continuation of the high interest rate environment may amplify the downward pressure on the economy, gold as a non-US dollar asset replacement, when the downward pressure on the economy heats up, the safe-haven attribute will gradually become prominent, non-speculative positions in the Fed loose less than expected, or the time point of interest rate cuts to provide support for gold prices, gold prices will benefit from the Fed's interest rate cut space and hedging premium two-line logic for a long time.

Source: Yicai