Hua'an CSI Shanghai Shenzhen Hong Kong Gold Industry Stock ETF (159321): Focus on gold stock assets and focus on diversified asset allocation
Essence of gold: As a special commodity, gold, a credit like commodity with value preservation and benchmarking against the US dollar, has triple attributes of commodity, currency and finance. The root of this is a kind of credit like currency with the characteristics of both hedging and benchmarking against the US dollar. The hedging nature makes it anti inflationary, and the opportunity cost of the benchmark dollar is the yield of the dollar (the US real interest rate).
Drivers of gold price
The real interest rate in the United States is the starting point of gold analysis and the fundamental reason driving gold prices. As a commodity similar to currency, gold is essentially a non interest bearing dollar asset. Therefore, considering the opportunity cost of holding gold, gold price fluctuation mainly depends on the relative return performance between gold and dollar assets. The real interest rate is determined by the nominal interest rate and the inflation rate, which can lead to the two most important cycles of the gold driving framework: the monetary cycle and the inflation cycle. The cyclical change of gold price is closely related to the economic cycle of the United States. The monetary policy of the Federal Reserve and the real economic situation of the United States are the two main factors affecting gold price.
Prospects for future gold market
In the past decade, interest rate changes have been the main factor affecting the short-term and medium-term gold transactions, closely following the cyclical fluctuations of the US economy. When the US economy turned from a boom to a recession, global investors generally sought gold as a safe haven asset. Although the current US economy shows a certain degree of elasticity, with the continuous effect of high interest rates, the downward pressure of the economic cycle is gradually emerging. Starting from front-end industries such as real estate and manufacturing, signs of recession are gradually spreading to back-end areas such as consumption and employment. Although the economy has remained relatively strong and resilient in the process of decline, its overall weakening trend has not changed. Central bank gold purchase demand: the global central bank gold reserves have increased by more than 1000 tons for the second consecutive year and are expected to continue. Looking ahead, the central bank's demand for gold purchase is expected to maintain growth. Looking back from the current time point, the market has begun to trade the second wave of interest rate cut expectations of the Federal Reserve in the short term. According to historical experience, the overall trend of the market is generally upward in the whole process from the start of the expected interest rate cut to the actual landing of the first interest rate cut. The second quarter of 2024 may be the best time for the expected transaction of interest rate reduction, and June may be the time point for the first interest rate reduction of the Federal Reserve. However, once the first interest rate cut actually occurs, the gold price may enter a period of fluctuation, and the market will expect more catalytic factors to promote the further trend of the gold price.
Hua'an CSI Shanghai Shenzhen Hong Kong Gold Industry Stock ETF
Hua'an CSI Shanghai Shenzhen Hong Kong Gold Industry Stock ETF (159321) closely tracks the underlying index, seeking to minimize tracking deviation and tracking error.
Risk warning
1. Unexpected changes in gold and precious metal fundamentals and international markets; 2. Historical data measurement does not fully represent future performance.
