Core Insights - Recent spot gold prices have been rising, with market sentiment indicating a potential breakthrough of historical highs [1] - Factors such as global uncertainty, increased geopolitical risks, and adjustments in major central bank monetary policies have significantly enhanced the appeal of spot gold as a safe-haven asset [1] - Analysts note that fluctuations in the US dollar index, changes in US Treasury yields, and rising inflation expectations are providing strong support for spot gold prices [1]

Group 1: Federal Reserve Policy Shift - The Federal Reserve is transitioning from a hawkish to a dovish stance, with Chairman Powell indicating that inflation is nearing target levels and monetary policy will gradually shift towards easing [1] - Market expectations for a rate cut in November have surged to 92%, significantly lowering the holding cost of gold, which has led to gold prices breaking historical highs [1] Group 2: Geopolitical Risks - The escalation of the Russia-Ukraine conflict and the breakdown of negotiations over Iran's nuclear issue have heightened global risk aversion, resulting in a single-day influx of over $5 billion into gold [2] Group 3: Weakening Dollar Index - The dollar index has fallen from a high of 105 to below 103, which has positively impacted gold prices, as historical data shows that a 1% drop in the dollar index correlates with an average 1.2% increase in gold prices [3] Group 4: Central Bank Gold Purchases - Central banks globally have increased gold purchases, with a report indicating that by 2025, purchases will exceed 1,200 tons, and China's central bank has been increasing its holdings for 10 consecutive months, raising gold reserves to 7.2% [4] Group 5: Rising Inflation Expectations - Despite the Federal Reserve's attempts to control inflation, rising energy prices and supply chain disruptions are pushing inflation expectations higher, increasing the demand for gold as a traditional hedge against inflation [5] Group 6: Investment Recommendations - Short-term focus on a support level of $3,680 for gold, with a recommendation to increase the allocation to 15% of the asset portfolio for the medium to long term [6] Group 7: Technical Analysis of Gold - Gold has confirmed a "flag breakout" on the weekly chart, closing at $3,727, indicating strong bullish momentum [7] - The key resistance level of $3,700 has turned into strong support, with the next target at $3,820 based on Fibonacci extension [8] Group 8: Domestic Gold Market Insights - Domestic demand for gold jewelry has decreased by 24%, while investment gold bars have surged by 25%, indicating a shift from consumption to preservation of value [10][11] - The price difference between domestic and international gold has reached a historical high, presenting arbitrage opportunities for professional investors [12] Group 9: U.S. Treasury Yield Inversion - The 10-year U.S. Treasury yield has dropped below 4%, showing a strong negative correlation with gold prices, which reduces the holding cost of gold [14] - Bridgewater Associates has increased its holdings in gold ETFs from 15% to 25%, reflecting institutional concerns over stagflation risks [15] Group 10: Gold Mining and Recycling Trends - The average global gold mining cost has risen to $1,800, putting pressure on mining profits, suggesting a focus on low-cost leaders like Barrick Gold [17] - The volume of gold recycling has increased by 40% year-on-year, with a record 120 tons recycled in September [18] - The open interest in gold options has doubled, indicating a surge in market hedging demand [19]

Core Viewpoint - Despite the consumer price inflation rate in June reaching nearly double the central bank's 2% target, the market widely expects the Bank of England to lower the benchmark interest rate from 4.25% to 4% on Thursday, with further cuts anticipated by the end of the year [1] Global Context and Outlook - Following the Russia-Ukraine conflict in 2022, UK inflation surged, peaking at 11.1%, largely due to its heavy reliance on natural gas for heating and power generation. Inflation significantly decreased in 2023, projected to bottom out at 1.7% in September 2024, but is expected to rebound stronger than in the US and Eurozone. The June inflation rate rose to 3.6%, the highest since January 2024, with some economists predicting it will soon exceed 4% [2] Inflation Expectations - Most Bank of England officials view inflation expectations from businesses and households as crucial indicators for future price trends, wage demands, and the central bank's credibility. These expectations have been rising over the past year, with the Citigroup/YouGov long-term expectations index nearing its highest level since late 2022, while the central bank's own survey reached a new high since 2019. However, some officials believe these surveys reflect reactions to recent inflation rather than predictions of future behavior [5] Domestic Inflation Stickiness - Despite a significant drop in overall inflation in 2023, two key indicators of long-term domestic price pressures remain elevated: service price inflation, heavily influenced by labor costs, and core CPI, which excludes volatile factors, both consistently above overall inflation. Additionally, food and beverage prices, which greatly affect public inflation perception, especially among low-income groups, are accelerating [8] Wage Growth Trends - The annualized regular wage growth in the private sector has decreased from over 8% two years ago to just below 5%, yet it remains approximately 2 percentage points higher than pre-pandemic levels and well above the 3% benchmark deemed compatible with the 2% inflation target. The central bank and surveyed employers expect wage growth to further slow to 3% over the next 18 months, but the decline has not been steady, and rising unemployment and reduced job vacancies may not ensure a rapid cooling of wages as anticipated [11] PMI Cost Pressure Indicators - The S&P Global July Purchasing Managers' Index indicates that UK businesses are "strongly" raising prices. Although the rate of price increases has decreased compared to 2022, the current increase remains above pre-pandemic levels. Over the past year, costs in both the service and manufacturing sectors have risen significantly, which, if passed on to consumers, could elevate prices [14]

Group 1 - As of April 2025, China's gold reserves reached 73.77 million ounces, an increase of 70,000 ounces month-on-month, marking the sixth consecutive month of gold accumulation by the central bank [1] - The increase in gold reserves reflects a trend towards diversification in China's foreign exchange reserve investments, aligning with global central bank actions [1] - In the first quarter of this year, global central banks purchased 244 tons of gold, consistent with the normal quarterly purchase levels over the past three years [1] Group 2 - UBS predicts that central banks will buy approximately 1,000 tons of gold in 2025 due to rising structural demand for gold amid increased risk aversion [2] - Zhang Bo, a senior gold analyst, emphasizes that despite short-term adjustments in international gold prices, the long-term demand for gold will remain strong due to its monetary and financial attributes [2] - East China Futures forecasts a continued gold bull market driven by ongoing central bank purchases, U.S. debt monetization pressures, and the "de-dollarization" process, raising the 2025 gold price target to $3,500-$3,600 per ounce [2]