Zhi Tong Cai Jing·2025-10-16 23:36Core Viewpoint - The report from China Merchants Securities indicates that gold prices have surged due to the U.S. government shutdown and Trump's announcement of a 100% tariff increase on China, with spot gold prices surpassing $4,000 per ounce and reaching a historical high of $4,059 per ounce [1] Group 1: Short-term Factors - The short-term price determinants for gold include anti-inflation and risk-averse sentiments, which are expected to keep gold prices strong in the near term [1] - The current U.S. government debt has reached a leverage ratio of 107.7%, allowing authorities to utilize the dollar's status as a global currency to reduce actual debt burdens through depreciation [1] Group 2: Long-term Factors - Three long-term factors are anticipated to drive the upward movement of gold prices: the high U.S. government debt, the depreciation of the dollar since the pandemic, and the increasing global central bank purchases of gold, which have totaled 4,340.3 tons since the pandemic [1] - The share of gold in foreign exchange reserves has risen to 22.37%, an increase of approximately 5 percentage points over the past year, reflecting a revival of gold's monetary attributes post-Bretton Woods [1] Group 3: Market Dynamics - Global gold ETFs have started buying gold since Q3 2024, with a total net purchase of 1,490.01 tons from Q3 last year to Q2 this year, accounting for 34.3% of the total net purchases by global central banks over the past five years [2] - The anticipated interest rate cuts by the Federal Reserve, with expectations of two more cuts this year, are likely to influence gold prices negatively correlated with U.S. Treasury yields and the dollar index [2] - The reversal of price deflation policies in China is expected to alleviate downward price pressures globally, further supporting gold prices [2]