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international gold prices hit a new high, can it continue?

last night, the price of gold hit a new record high in late trading in new york, reaching $2,560 per ounce, with a daily increase of nearly $50. at the close of trading, comex gold futures prices rose 1.76% to $2,587.2 per ounce.

on the news front, the latest data released by the u.s. department of labor showed that the u.s. ppi in august increased by 1.7% year-on-year, while the previous growth rate was revised from 2.2% to 2.1%. in addition, the ppi in august increased by 0.2% month-on-month, exceeding market expectations by 0.1%. the core ppi increased by 2.4% year-on-year, an increase from 2.3% in the previous month; it increased by 0.3% month-on-month, also exceeding expectations by 0.2%.

in the latest monetary policy decision, the ecb cut interest rates last night, with the deposit facility rate falling by 25 basis points, while the main refinancing rate and marginal lending rate were significantly reduced by 60 basis points respectively. after this adjustment, the main refinancing rate fell to 3.65%, the marginal lending rate fell to 3.90%, and the deposit facility rate fell to 3.50%.

meanwhile, the market is paying close attention to the federal reserve's upcoming interest rate meeting next week. according to recent reports and analysis, the federal reserve is very likely to cut interest rates by 25 basis points at its september meeting, and the total rate cut this year may reach 100 basis points.

many industry insiders pointed out that since the federal reserve’s september interest rate cut has been basically implemented, the market is currently speculating whether the fed will cut by 75 basis points or 100 basis points for the whole year. in general, the market expects the fed to become increasingly dovish. in this environment, the probability of the us dollar falling below the 100 mark is very high, and commodities and precious metals are expected to continue to rise.

gold etfs lead the gains today

the rise in gold prices has also been transmitted to the secondary market. as of today's closing, the wind gold industry index rose 3.17%, shandong gold rose 2.90%, chifeng gold rose 3.60%, zijin mining rose 3.38%, and many gold stocks such as shanjin international, hunan gold, and sichuan gold rose.

in the hong kong stock market, as of the closing, china gold international, zhaojin mining and tongguan gold rose by 5.46%, 3.64% and 3.92% respectively.

affected by this, today's etf growth list is dominated by gold-related products. as of the close, yongying csi shanghai-shenzhen-hong kong gold industry stock etf rose 2.54%, icbc csi shanghai-shenzhen-hong kong gold industry stock etf rose 3.19%, cathay csi shanghai-shenzhen-hong kong gold industry stock etf rose 2.55%, huaan csi shanghai-shenzhen-hong kong gold industry stock etf rose 3.22%, and the gold industry stock etfs under ping an fund and hua xia fund rose 2.47% and 2.70% respectively.

the intraday gains of other gold-related etfs and lofs were all above 1%. (as shown below)

looking at the long-term trend, as of september 12, comex gold has increased by 24.88% this year, and some etfs have also seen impressive net value increases this year, with a total of 19 products seeing net value increases of more than 10% this year. (as shown in the figure below)

among them, huatai gold and precious metals a had the largest net value growth during the year, reaching 20.13%, e fund gold theme a increased by 20.07% in rmb, and the net value growth rates of harvest gold (qdii-fof-lof), e fund gold etf, guotai gold etf, huaan gold etf, bosera gold etf, hua xia gold etf, qianhai kaiyuan gold etf, icbc gold etf and guotai gold etf link a all exceeded 19%.

in the second quarter, many funds invested heavily in gold stocks

as gold prices continue to rise, many fund managers have also become fond of gold stocks and have already ambushed them.

in terms of heavily-held shares, public funds also held a large number of gold stocks in the second quarter. as of the end of the second quarter, there were 13 gold stocks that were heavily-held. among them, zijin mining was the most held, with 1,165 funds holding it and a total of 3.163 billion shares. compared with the end of the previous quarter, public funds as a whole increased their holdings of zijin mining by a total of 14.8979 million shares.

among them, hua xia sse 50 etf has the largest holding of 264.3715 million shares. the four csi 300 index etfs - huatai-pinebridge csi 300 etf, e fund csi 300 etf, harvest csi 300 etf, and hua xia csi 300 etf hold 194.6123 million shares, 129.3937 million shares, 95.2387 million shares, and 91.6475 million shares of zijin mining, respectively.

in terms of stock price, as of the close of the market on the 13th, zijin mining's year-to-date increase was 19.95%.

shandong gold is heavily held by 238 public funds. among them, gf stable growth, managed by well-known fund manager fu youxing, holds the largest number of shares, which is 16.601 million shares. dongfanghong qidong three years holding, managed by li jing, holds 9.7391 million shares.

shandong gold's share price also saw an encouraging increase this year, reaching 12.32%.

cicc gold is heavily held by 212 products, among which huatai-pinebridge fuli, dacheng new industries, huatai-pinebridge dingli, china-europe dividend premium, huatai-pinebridge multi-strategy, wanjia dual engine, dacheng ruijing, southern csi shenwan nonferrous metals etf, invesco great wall jingyi double profit, yinhua domestic demand select, and yinhua tongli select all hold more than 10 million shares.

the cumulative increase in cicc gold's share price this year has also reached 29.15%.

in addition, shanjin international and chifeng gold are heavily held by 178 and 100 funds respectively. the year-to-date gains of the two stocks have also been good this year, at 13.00% and 23.63% respectively.

can the strong gold price continue?

since the beginning of the year, gold prices have continued to rise, and the strong upward trend has raised questions among investors: how long can this momentum last? is it the right time to invest in gold?

yang ao zheng, chief chinese market analyst at fxtm, mentioned in an interview with a reporter from cailianshe recently that in terms of gold prices, the last interest rate cut cycle started on july 30-31, 2019. in the month before that date, the price of gold rose from 1400 to a maximum of 1453, and further rose to a maximum of 1555 in the month after the interest rate cut. this reflects that the volatility of gold prices before and after the interest rate cut is very strong. with the weakening of the us dollar, gold prices have shown a significant trend under the anticipation of interest rate cuts. at the current historical high, it is believed that there is still hope to rise further to the $2,600 mark.

"i believe that gold will have the opportunity to break new historical highs. the current cycle of gold is basically consistent with the cycle of interest rate hikes and cuts."

the interest rate cuts will not only occur in september and december. yang aozheng predicts that the fed's interest rate cut cycle may continue in the next two years, and it may last until 2026 before the fed returns to a neutral interest rate. the cycles of coal and gold usually appear earlier than the actual interest rate cut time nodes. this is because the market anticipates this first. gold may reach its peak about halfway through the interest rate cut cycle.

yang aozheng said that given that he expects the future rate cut cycle to last for two years, gold prices are expected to continue to rise in the next year. in fact, the market's expectations for rate cuts have begun to be reflected in the past year, pushing gold prices up gradually, which shows that investors have already laid out their expectations for rate cuts in advance. according to historical data, gold prices usually have about $100 of room to rise after the first rate cut.

however, it is still unknown whether historical experience will be verified again this time. whether gold will definitely rise by $100 after the september rate cut still needs to be judged comprehensively based on multiple factors. however, despite the uncertainty of the increase, historical trends show that the upward momentum of gold still exists.

kaiyuan securities research believes that the current weakening of us macro data has laid the foundation for the fed to open a window for interest rate cuts. however, as september to november is the peak season for seasonal demand in the northern hemisphere, it is expected that the fed's rate cut rhythm will still need to be adjusted based on the performance of the peak season. under the interest rate framework of gold investment, a new hitting point for gold equity may emerge.

everbright futures believes that the ecb's interest rate cut has ignited the sentiment of long funds. the market expects that the probability of the fed's cumulative interest rate cut by more than 50 basis points by november is increasing. in the short term, gold will be treated as strong. donghai futures believes that from a long-term trend, with the increase in expectations of the fed's interest rate cut and the uncertainty of the global economy, gold is still expected to remain strong in the coming months.