The Zhitong Finance App learned that Tianfeng Securities released a research report saying that looking at the big cycle (divided into three major cycles from 1971 to the present), compared to the second gold bull market, it is currently likely to be in the middle and early stages of the gold bull market. There are macroeconomic expectations of interest rate cuts, high inflation, and a downward dollar index, which is compounded by the background of de-dollarization and decentralization in countries around the world. Looking at the short cycle (2-3 years), the US dollar and US bond yields are declining, and real interest rates may enter a downward cycle, compounding the safe-haven demand generated by geopolitics. Gold is currently in the middle of the upward phase of the small-cycle model. It has now experienced the first round of kickoff brought about by the slowdown in global economic growth, and is gradually moving towards a new high point.

Recommended attention: Shandong Gold (600547.SH), Yintai Gold (000975.SZ), Chifeng Gold (600988.SH), and China Gold (600489.SH).

Tianfeng Securities's views are as follows:

The traditional interest rate pricing framework deviated somewhat from the gold trend after 22 years, but there is still a strong explanation for the gold price trend.

Gold naturally has safe-haven and anti-inflationary properties. The core of risk hedging is the spillover effect of risk events on the global economy. Anti-inflation is reflected in the higher the risk interest rate, the higher the opportunity cost of holding gold. In the short to medium term, without the impact of larger exogenous risk events, gold is still mainly related to the US dollar credit system. There is a clear negative correlation between gold and the US real interest rate, and the real interest rate framework still has a strong explanation for gold price trends.

Gold stands at the starting point of a medium- to long-term bull market. De-dollarization is the underlying logic:

Looking at the big cycle (divided into three major cycles from 1971 to the present), compared to the second gold bull market, the current probability is that it is currently in the middle and early stages of the gold bull market. There are macroeconomic expectations of interest rate cuts, high inflation, and a downward dollar index, compounded by the background of de-dollarization and decentralization in countries around the world. Looking at the short cycle (2-3 years), the US dollar and US bond yields are declining, and real interest rates may enter a downward cycle, compounding the safe-haven demand generated by geopolitics. Gold is currently in the middle of the upward phase of the small-cycle model. It has now experienced the first round of kickoff brought about by the slowdown in global economic growth, and is gradually moving towards a new high point.

Excluding the impact of inflation itself, after the coefficient returns to current consumption levels, gold may run above 2,400 US dollars/ounce.

The bank uses a regression coefficient to remove the impact of inflation itself on the price of real assets. The line uses the 1982=100 CPI and PPI data as fixed base points to obtain corrected values for gold, CPI, and PPI fixed base coefficients. After restoring the current level of inflation, the highest point of gold elasticity can be obtained. Refer to the 2021 CPI fixed base point value of 2370.71 US dollars/ounce, and the value of the 2021 PPI fixed base point is 2555.21 US dollars/ounce.

Historical trends in gold stocks and gold prices converge, but are more flexible.

The current gold upward cycle begins, and the elasticity of gold stocks is about 2.23 times the price of gold. The trend of gold stocks and gold prices is basically the same, which is basically in line with historical trends. The bank believes that gold companies' profit release time lags behind commodity performance, so there is a phased divergence between the equity market and commodity market performance. However, as the price of gold continues to rise, profits will be released more smoothly after the gold stock balance sheet is repaired. Recommended attention: Shandong Gold, Yintai Gold, Chifeng Gold, China Gold.

Risk warning: Uncertain risk of the Fed cutting interest rates, risk of US inflation continuing to exceed expectations, risk of falling sharply in precious metals prices, risk of untimely commissioning of gold mining projects.