According to Deutsche Bank's analysis, as central banks around the world continue to increase the share of gold in their reserve assets, the precious metal still has room for further gains. Sachdeva, Mallika, a strategist at the bank, noted in a report published on Monday that as monetary policymakers seek tools to hedge against geopolitical turmoil, gold's share in global central bank reserves has risen from about 10% in the 1990s to 30% today. Meanwhile, the US dollar's share in foreign central bank reserves has fallen from over 60% to 40%. Sachdeva said: "The gap between the dollar and gold's share in reserves is now only 10 percentage points, which is extremely noteworthy." The London-based strategist believes that central banks appear to be reversing the 1990s trend, when they shifted asset allocations from gold to the US dollar. Sachdeva also acknowledged that about 80% of the increase in gold's share of central bank reserves was due to the rise in gold prices themselves rather than new purchases. Last year, gold posted its strongest annual gain since 1979 — ironically, the year of the Iranian Revolution. Over the past 12 months, gold prices have risen by more than 40% cumulatively. However, Sachdeva pointed out that central bank purchases still accounted for a significant share of the growth in reserve holdings, and it was often central bank buying that drove gold prices higher. He said: "Therefore, there is an endogenous link between purchases and prices, and the two together have driven the increase in gold's share." Gold has long been regarded by investors as a safe-haven asset during times of global conflict. Since 2022, this attribute has continuously driven investors toward gold — first due to the Russia-Ukraine conflict, and then the US and Israeli strikes against Iran. The strategist said that the next move in gold prices will partly depend on how much gold and US dollars emerging economy central banks will ultimately hold. Deutsche Bank's analysis of International Monetary Fund (IMF) data showed that since the global financial crisis, all central bank gold purchases have come from emerging market central banks. Sachdeva further stated that even if total foreign exchange reserves in emerging markets decline to $5 trillion, as long as they set a target of 40% for gold's share in their reserves, gold prices could reach $8,000 per ounce over the next five years. This level would be approximately 70% above current gold prices.

After a period of sluggish performance, gold mining stocks have collectively strengthened today. As of press time, Chifeng Gold (06693.HK) has risen by 11.43%, Lingbao Gold (03330.HK) by 7.27%, Shandong Gold (01787.HK) by 6.15%, and China Gold International Resources (02099.HK) by 4.39%. Note: Performance of gold mining stocks Behind this unusual movement is the resurgence of international gold prices after a brief pullback. As of press time, COMEX gold futures prices have surpassed $3,370 per ounce. Gold prices' "V-shaped" reversal: Resonance of three catalysts Firstly, US President Trump announced on May 5 that a 100% tariff would be imposed on imported films produced overseas. Although this policy appears to target the film and television industry, it has triggered multiple chain reactions: On the one hand, the market fears that escalating trade frictions will impact the global supply chain, stimulating a rush of safe-haven funds into gold. On the other hand, the soaring costs of imported films may push up US inflation expectations, enhancing gold's inflation-hedging properties. Previously, Trump had already imposed tariff hikes on semiconductors, rare earths, and other sectors. Secondly, Israel declared on May 4 that it would retaliate against the Houthi forces in Yemen and Iran, escalating tensions in the Middle East once again. Finally, the US dollar index has continued to pull back recently, further boosting the attractiveness of gold prices. Gold mining stocks performed brilliantly in Q1 In addition to the three market factors boosting gold prices, miners with significant ties to gold have also benefited. Benefiting from the rise in gold prices, the performance of leading miners has continued to soar. Chifeng Gold's net profit in Q1 2025 increased by 141% YoY, while Shandong Gold's net profit growth reached 46.6%. Some institutions predict that if gold prices remain above $3,300, the annual net profits of major miners are expected to achieve 30%-50% growth. How do institutions view the subsequent performance of gold prices? Goldman Sachs released a research report stating that the bank reaffirms the logic of a "super cycle" for gold, raising its target price to $3,700 by the end of 2025 and to $4,000 by mid-2026. They also emphasized that if the credibility of the US Fed's policies is questioned, gold prices could surge to $4,500. Galaxy Securities believes that current gold prices need to digest the rapid gains from the previous period and may experience sideways movement in the range of $3,150-$3,550 in the short term. A breakthrough requires two signals: one is the initiation of an interest rate cut cycle by the US Fed, and the other is an explosion in physical demand. The institution pointed out that the scale of domestic gold ETFs has exceeded 130 billion yuan, surging by 160% YoY, and the consumption peak season in H2 may become a new catalyst.

The price of gold is influenced by various factors, including supply and demand dynamics, inflation, interest rates, the value of the US dollar, geopolitical events, speculation, and market conditions. Gold mining, central bank reserves, and recycling are the key factors in gold supply, while jewelry, industrial demand, and demand for gold-backed ETF investments impacts overall demand. Gold is often used as a hedge against inflation, but may perform poorly during periods of deflation. Interest rates have an inverse relationship with gold prices, and a weakening US dollar often drives up gold prices. The instability and uncertainty of geopolitics will encourage investors to seek gold as a safe haven asset. Speculation, market sentiment, and global events can also affect gold prices. Understanding these dynamics is crucial for making informed decisions in the commodity market. Maintaining a clear understanding and a calm mind can help identify successful opportunities in the constantly evolving global economy.