Industrial: This round of gold price increase has switched from anti-inflation to risk aversion, and supply-demand mismatch factors have also contributed to it.

Industrial released a research report stating that on February 5, 2025, COMEX gold futures broke through $2900 per ounce, setting a new historical high. The macroeconomic clue behind this round of gold price increase is the switch from inflation resistance to risk aversion. In addition to the macro level, there has been a widening price difference between recent COMEX gold futures and London gold spot prices, indicating that structural factors have helped drive the gold price increase. Currently, the consensus in the market is that the US economy is experiencing a soft landing, the central point of US bonds is rising, and the Fed's policy of "tapering and halting" in 2025 has been fully priced in. In the recent period, there has been a temporary loosening of pricing liquidity which is still favorable for gold, but recent price increases clearly indicate a spike. The main points of Industrial are as follows: The macroeconomic clue behind this round of gold price increase: a switch from inflation resistance to risk aversion. This round of gold price increase began in mid-December 2024, and from the overall performance of various asset classes in the market, the market logic can be divided into two segments: (1) From mid-December to mid-January, gold rose, US stocks fluctuated, oil prices and US bond yields rose, the US dollar strengthened. At the time, Fed officials began to tighten at the December interest rate meeting, and US manufacturing PMI and non-farm payroll data were strong. Market expectations for rate cuts in 2025 dropped from 2.5 times to 1.5 times, indicating that the main macro trend for gold in this period was inflation resistance. (2) From mid-January to present, gold rose but oil prices and US bond yields fell back, the US dollar and US stocks fluctuated. Expectations of increased oil supply by Trump lowered oil prices and eased inflation concerns. US GDP and service industry PMI fell below expectations, leading to a reduction in tightening expectations and a switch in macro trend to risk aversion: the impact of Deepseek on the US stock market AI narrative, the uncertainty brought about by the US's erratic trade policy suggests that the main macro trend for gold in this period is risk aversion. Beyond the macro level: Supply-demand mismatch has helped boost the price of gold. It is worth noting that there has been a widening price difference between recent COMEX gold futures and London gold spot prices, indicating that structural factors have contributed to the rise in gold prices. At the same time, gold stocks on the NYSE have been rapidly accumulating. According to a report in the Financial Times on January 29, global traders and financial institutions have shipped about 393 tonnes of gold to COMEX since the US election. On the one hand, concerns under trade frictions and the potential imposition of tariffs on non-US regional goods including precious metals have prompted a shift; on the other hand, the premium of US gold futures prices over spot prices has exacerbated the shift. Looking ahead, the loose pricing liquidity has not yet ended, and gold prices may have partially reflected the fundamental clues. The current consensus in the market is that the US economy is experiencing a soft landing, the central point of US bonds is rising, and the Fed's policy of "tapering and halting" in 2025 has been fully priced in. In the recent period, we have entered a stage of temporary loose pricing liquidity: on the one hand, the rise in long-term rates in 2024 Q4 will suppress the performance of US manufacturing and real estate; on the other hand, a correction in US stocks will also present challenges to consumption through the wealth effect. Considering that in the short term, under the constraint of the debt ceiling, the US fiscal policy cannot exert strong force, the stage of softer economic marginal growth and relatively loose liquidity has not ended yet. The key points in the near future will be the non-farm payroll report this Friday and the CPI report next Wednesday. In this stage, it is expected that US bond yields will continue to decline, and market expectations for the number of rate cuts for the whole year will moderately increase. For gold, loose pricing liquidity continues to be favorable, but recent price increases indicate a spike. As for the risk aversion clues, the next important point will be the feedback from Trump's "America First Trade Policy Memorandum" in early April after the imposition of 10% tariffs in the US-China trade dispute; tariffs on Canada and Mexico have also been granted a 30-day postponement window; attention will then turn to the EU, but this also means that the uncertainty in the tariff narrative in the first quarter of this year may extend into the middle and later stages. Recently, the US dollar index began to soften marginally, and as policy uncertainty temporarily recedes, gold may experience a pullback. Short-term corrections are opportunities, and the medium to long-term logic of gold remains very smooth. In the first half of the year, the macro logic of oscillating between "inflation resistance" and "loose liquidity" is beneficial for gold, and Trump's characteristic of "policy reversals" also means that uncertainty will support gold. Unfavorable scenarios may occur in the second half of the year: when tax cuts are implemented, US economic and profit expectations actually improve; while the impact of tariffs on inflation has not yet been reflected, the US may enter a period of "recovery" narrative, putting pressure on gold as funds will prefer stocks, especially cyclical ones. However, from a longer-term perspective, the difficulties in solving fiscal problems during Trump's presidency, the high and difficult-to-lower deficit rate of over 6%, and the challenges posed by anti-globalization to the US dollar system all suggest that central banks around the world have not finished reallocating gold. Therefore, the characteristic of gold being "easy to rise and hard to fall" is expected to continue, with each dip potentially being a good opportunity for allocation. Risk warning: US inflation exceeding expectations, Fed monetary policy tightening exceeding expectations, overseas economic downturn risks.