Gold Surpasses $2,900 per Ounce as Central Banks Increase Gold Holdings for the Third Consecutive Month; UBS Predicts Gold to Rise to $3,000 per Ounce; Gold Stock ETFs Reach Record Highs... Gold is in the spotlight.
Since the opening of the A-share market on February 5, brokers' attention to the gold market has significantly increased. As of February 11, 62 gold-related research reports were published by 31 brokerage research institutions over the past seven calendar days.
Among them, Industrial Securities published the most reports with 5; China Securities published 4; and Ping An Securities, Debon Securities, Huatai Securities, Guosen Securities, Shenwan Hongyuan, Dongwu Securities, and Huaxi Securities each published 3.
Brokerages that published 2 gold research reports include Minsheng Securities, CITIC Securities, Haitong Securities, Western Securities, Huachuang Securities, Guotai Junan, and CICC. Those with 1 report include Donghai Securities, Guotou Securities, Dongxing Securities, Zhongyou Securities, GF Securities, Orient Securities, Huafu Securities, Cinda Securities, Changjiang Securities, China Galaxy, Guojin Securities, China Merchants Securities, Guosheng Securities, Wanlian Securities, Minmetals Securities, Xiangcai Securities, Guolian Minsheng, and Kaiyuan Securities.
With the market's sharply increased attention, will this lead to a "reversal of extremes"? On the morning of February 11, spot gold experienced a brief plunge, quickly turning from a 1.1% gain to a loss. Whether this is a good opportunity to enter the market or a signal to retreat remains a question with varied answers among investors.
Seller Research: Gold Bull Market Accelerates
Gold prices continue to hit new highs, with brokers generally optimistic about the future trend of gold. Titles such as "Gold Bull Market," "Medium and Long-Term Allocation Value Remains," "Focus on Opportunities for Right-Side Layout of Gold Stocks," and "Gold Rally Not Over" have become prominent keywords in many research reports.
On February 10, spot gold prices surpassed $2,900 per ounce for the first time, setting a new historical record. This marked the seventh time in the past eight trading days that spot gold reached a new high.
Huatai Securities' research report expressed optimism about the upward trend in the gold cycle. In 2025, the short-term drivers of gold price increases may stem from changes in US tariff policies triggering reflation and global economic uncertainties. Coupled with market concerns over the valuation bubble in US stocks, some funds may shift to gold for hedging purposes. The bottom support level for gold prices in 2025 is expected to be between $2,500 and $2,600 per ounce.
Huatai Securities also mentioned that in the long term, de-globalization and concerns over US dollar credit may sustain strong global investment demand for gold, central bank net gold purchases, and technological demand, while supply is likely to remain relatively stable. The improvement in the supply-demand pattern may lead to gold prices fluctuating upward. Additionally, the initiation of China's insurance capital investment in gold trials may bring new marginal benefits to gold demand.
Jin Qianjing, Chief Analyst of Asset Allocation and Bonds at Shenwan Hongyuan, stated in a research report that in the medium term, central bank gold purchases and the persistently high US fiscal deficit provide gold prices with potential for a trend of upward movement. Although recent nonlinear changes in favorable factors or profit-taking may lead to short-term corrections in gold prices, over the next 3-6 months, central bank gold purchases and uncertainties surrounding Trump’s policies are expected to drive gold prices to new highs. Furthermore, geopolitical pulse-like changes under Trump 2.0 may increase gold price volatility. From a tactical timing perspective, it is recommended to closely monitor changes in China's ETF inflows and US Treasury yields, as gold often presents better allocation opportunities after US Treasury yields peak.
Minsheng Securities believes that under the macro narrative of global monetary oversupply, weakening US dollar credit, escalating geopolitical tensions, and rising potential risks of secondary inflation in the US, factors such as foreign tariff policies, setbacks in overseas risk asset returns, and continued global central bank gold purchases further reinforce gold's hedging and value-preserving functions. With the significant rise in gold prices, the gold bull market is accelerating. Considering the current prolonged US interest rate cut cycle, there remains substantial room for future gold price increases.
Insurance Capital Entry Brings New Incremental Demand to the Gold Market
Notably, the trial of insurance capital investment in gold is expected to have a positive impact on the gold market. According to data compiled with iFinD from Tonghuashun, brokers have published 21 related research reports on this topic, accounting for nearly one-third of the aforementioned reports.
CITIC Securities' research report pointed out that on February 7, the General Office of the National Financial Regulatory Administration issued a notice on the trial of insurance capital investment in gold, aiming to broaden the channels for insurance capital utilization, optimize the structure of insurance asset allocation, and promote the improvement of asset-liability management by insurance companies. It is estimated that during the trial phase, the theoretical upper limit for insurance companies' gold investments is approximately 200 billion yuan. In terms of allocation value, gold has long demonstrated a high return-to-risk ratio and, in recent years, has shown reduced correlation with traditional assets. Adding gold to traditional stock-bond portfolios can significantly improve the efficient frontier of the portfolio.
Guolian Minsheng Securities believes that the entry of Chinese insurance capital into the gold market brings new incremental demand, enhancing market liquidity and supporting gold price stability to some extent. The growth potential of the gold market remains strong, and with more capital inflows, gold prices are expected to continue their upward trend.
Minmetals Securities' research report stated that rising global uncertainty risks, sustained demand for inflation hedging, and the US Fed's initiation of an interest rate cut cycle indicate that the gold bull market is still underway. The combination of "low interest rates" and "asset scarcity" makes increased gold allocation by insurance companies beneficial for boosting investment returns and mitigating interest spread loss risks.
