Zhongyou Securities Li Shuaihua: Multiple driving factors are pushing the long-term upward trend of gold, which may continue.

Jin10 Data, October 15 - Recently, gold prices have been rising steadily. Li Shuaihua, chief analyst of nonferrous new materials at China Postal Securities, stated that three factors are driving the strength of gold prices in the short term. First, the Fed cut interest rates in September, releasing liquidity and attracting speculative funds into the gold market; second, global geopolitical conflicts have intensified, raising risk-averse sentiment; third, central banks around the world are accelerating diversification of reserves to hedge against dollar credit risk, leading to a continuous increase in gold ETF open interest. Additionally, the U.S. federal government “shutdown” further stimulates market risk-averse sentiment. Li Shuaihua believes that in the long term, first, the U.S. fiscal deficit and debt risk are difficult to resolve in the short term. Under high interest rates, the burden of interest on U.S. Treasury bonds increases, amplifying market concerns about dollar credit and driving demand for gold purchases by central banks. Second, as trade frictions and other factors weaken the dollar's dominance, the strategic value of gold as a safe-haven asset becomes more prominent. Finally, international geopolitical conflicts and the situation in the Middle East present geopolitical risks that are unlikely to dissipate in the short term, supporting the long-term attributes of gold as a safe haven. If the aforementioned variables (such as fiscal deficit, de-dollarization, and geopolitical conflicts) do not experience significant reversal, the long-term upward trend of gold will continue.