Sinolink: Historical highs under the triple framework, gold prices are expected to break through $3100.

Sinolink released a research report stating that after the Trump administration took office, inflation and inflation expectations in the United States are expected to rise, leading to a decrease in short-term real interest rates. This is likely to boost the price of gold. In the second half of the year, with the implementation of relevant fiscal policies, the deficit rate may rise more than expected. Based on credit analysis framework, the price of gold is expected to surpass the $3000 mark. Based on the two-stage 6-factor gold price model, the gold price for 2025 is forecasted to increase by 17.1% compared to the end of 2024, reaching $3092 per ounce. Key points from Sinolink are as follows: In January 2025, the London spot gold price rose by 6.26% to $2812.05 per ounce, and the SHFE gold price rose by 4.1% to 646.36 yuan per gram. From the performance of domestic and international gold prices, in the early to mid-January, SHFE gold reached a historical high before overseas gold prices due to exchange rate factors. The gold price has been rising steadily since 2025, with the London spot gold price increasing from $2611 per ounce at the end of 2024 to $2812 per ounce at the end of January 2025, breaking the historical high in October 2024 and setting new records. The rise in gold prices since the beginning of the year is mainly driven by several core factors: (1) inflation risks and safe-haven sentiment caused by uncertainties in U.S. tariffs; (2) inflation expectations rising due to a significant increase in oil prices in mid-January; (3) stagflation worries caused by lower-than-expected GDP growth in the U.S. in the fourth quarter; (4) slower-than-expected CPI growth in December and a less hawkish sentiment at the end of January's interest rate meeting compared to December; and (5) safe-haven sentiment triggered by geopolitical risks in the Middle East and between Russia and Ukraine. From the perspective of the real interest rate analysis framework, rising inflation and falling interest rates have been the main drivers of the increase in gold prices. The rise in gold prices in January can be divided into two stages: the first stage is the rise in gold prices due to inflation expectations in the early to mid-January period, with the fluctuation in real interest rates smaller than the fluctuation in inflation expectations. The second stage is in the late January, where the decline in nominal interest rates led to a decrease in real interest rates, causing the rise in gold prices, with the fluctuation in real interest rates larger than the fluctuation in inflation expectations. The turning point in logic may be related to Trump's first mention of the "Foreign Tax Bureau" on social media and the easing of Middle East geopolitical risks leading to a drop in oil prices. On January 24, the Fed raised interest rates by 25 basis points, causing the dollar to weaken, and on January 30, the ECB cut rates by 25 basis points, providing global liquidity support for gold prices. The hawkish stance of the Fed at the end of January's interest rate meeting was more moderate than in December. From the perspective of the supply and demand analysis framework, tariff expectations may have been one of the triggering factors for this round of gold price increases. On January 8, according to CNN, Trump is considering declaring a "national economic emergency" for the United States after taking office and citing the International Emergency Economic Powers Act (IEEPA) as legal basis for imposing indiscriminate tariffs on countries worldwide. On January 14, Trump announced on his self-created social platform "Truth Social" that he would officially establish the "Foreign Tax Bureau" on January 20, specifically responsible for imposing tariffs and collecting all income from overseas. Tariff expectations theoretically lead to higher gold prices domestically in the United States compared to other countries, under this expectation, the price difference between COMEX gold prices relative to London spot gold prices significantly widened in mid-January, and since January 8, COMEX gold inventories have begun to accelerate to prepare for a possible squeeze due to tariffs. The price difference between COMEX and LBMA gradually narrowed after January 20, possibly because Trump's inaugural speech only targeted tariffs on Mexico, Canada, and China, rather than a global universal tariff. Therefore, the price difference caused by tariff expectations narrowed as London spot gold prices caught up. From the perspective of the credit analysis framework, concerns about fiscal deficits and debt limits still exist, and the disruption from DeepSeek overseas is affecting the credit system. On January 2, the U.S. debt ceiling was raised from $31.38 trillion to $36.1 trillion, and by the end of January, the total outstanding public debt in the U.S. had reached a record $36.22 trillion, further exacerbating the financial burden of interest payments on outstanding debt. The impact of Trump administration policies on future fiscal deficits is still uncertain, but the pressure of high interest rates in the background of rising inflation continues to erode U.S. credit gradually. In late January, the gradual dissemination of information from DeepSeek's open-source model in overseas media caused a significant pullback in overseas tech stocks at the end of the month, raising concerns about weakening long-term economic growth momentum in the U.S., further impacting U.S. credit. The release of December central bank gold purchases data in early January and the release of global central bank gold purchases data for the fourth quarter of 2024 in early February were concrete expressions of the damage to the credit system, further driving gold prices to new highs. Recommended targets to watch are Shandong Gold Mining (600547.SH, 01787), Zhongjin Gold Corp., Ltd (6004891.SH), Hunan Gold Corporation (002155.SZ), Shanjin International Gold (000975.SZ) and others. Risk warning: The Fed's tightening of monetary policy is uncertain, gold company performance may fall short of expectations, and the U.S. economy may perform better than expected.