Macro - The rise in gold prices since 2022 is driven by three core factors: 1) cyclical factors related to the Federal Reserve's shift from rate hikes to potential cuts; 2) concerns over the credibility of the US dollar, prompting global central banks to diversify their reserves by purchasing gold; 3) short-term factors such as geopolitical tensions and uncertainties in global trade, leading to increased investment in gold as a safe-haven asset [1] - In the short term, gold prices are expected to experience volatility and enter a consolidation phase, but in the medium to long term, three factors will continue to push gold prices higher: 1) ongoing purchases of gold by global central banks to hedge against dollar credit risk; 2) a shift in global gold ETFs from net sellers to net buyers; 3) market expectations of two more rate cuts by the Federal Reserve this year, with potential for larger cuts after a change in leadership next year [1] Asset Allocation - Gold valuation remains at an acceptable level, with domestic institutions having room for increased allocation: based on quantitative metrics, the short-term focus should be on assessing market risk aversion through economic policy uncertainty indices, while the medium-term valuation perspective shows that the ratio of gold priced in dollars to reserve currency M2 is at a historical percentile of 77%, still within acceptable limits [2] - A horizontal comparison of mean-variance, risk budgeting, and all-weather strategies suggests optimal gold allocation ratios of 5%-10%, 10%-20%, and 20%-25% respectively; current allocations by public funds, bank wealth management, and insurance institutions are still at marginal growth levels, indicating potential for absolute increases [2] Precious Metals - Since mid-October, gold stocks have not followed the upward trend of gold prices primarily due to the significant rise in gold prices since August, leading to overbought technical indicators and cautious sentiment in the equity market, causing gold stocks to peak and retreat ahead of gold prices [3] - As gold prices stabilize and build a base, gold stock prices are expected to realign with gold prices; current valuations of gold stocks are at historical lows, with a rolling P/E ratio of approximately 30 times, indicating potential for recovery [3] - Recommended gold stocks include Lingbao Gold, Tongguan Gold, Zijin Mining International, Shandong Gold, Chifeng Jilong Gold, Shanjin International, and Zhongjin Gold; for silver, recommended stocks include Xingye Silver and Shengda Resources [3] Jewelry and Light Industry - Starting in 2024, the gold jewelry industry is expected to exhibit structural demand characteristics: first, consumption among the middle class and high-net-worth individuals in mainland China is weakening and becoming more rational; second, the continuous rise in gold prices will lead to a decline in the consumption of gold for jewelry starting in 2024; third, brands like Lao Pu, Chow Tai Fook, and others are focusing on craftsmanship upgrades and integrating traditional Chinese culture, positioning gold as a mainstream in the domestic jewelry fashion market [4] - Chow Tai Fook has returned to a mid-to-high-end positioning, with significant improvements in channel reform and product upgrades, resulting in a 4.1% year-on-year increase in overall retail value in Q3, with same-store sales growth of 7.6%; high-margin priced products contributed 30% to retail value, enhancing profitability [4]