Ping An Securities: Main trend clear, gold prices expected to continue rising.

With the uncertainty brought by the Trump administration, the ongoing US debt issue, and the weakening dominance of the US technology industry, the credit of the US dollar is expected to further weaken. The demand for gold as a safe haven and a store of value will continue to strengthen. In the past two years, central banks have maintained a high level of gold purchases, which will further endorse the gold's status as a hard currency. In the medium term, there is still significant room for gold prices to rise. Key points from Ping An Securities: Unusual gold trade reveals tariff concerns Since the end of 2024, gold prices have shown a strong trend. The wide gap in the COMEX-LBMA gold price differential since December 2024 has led to physical gold flowing into the US due to the arbitrage space brought by the COMEX gold premium. We believe that the change in global gold inventory structure further reflects the uncertainty of the Trump administration's rule, and concerns about gold tariffs have led to changes in inventory and arbitrage spreads. Currently, there is still an upward trend in global trade risks, and global gold trading markets may still experience significant fluctuations in gold inventory changes. Overseas uncertainties ferment, resonating in the short and long term The uncertainty of the Trump administration's policy itself and the risks brought by its implementation will continue to be priced in. Its fiscal policy, regulation, immigration policy, and other policy directions are still pending implementation. In addition, the tendency towards American isolationism is becoming apparent, disrupting past orders and paradigms. The uncertainty of the Trump administration's rule continues to rise. In addition, the long-term weakening of the US dollar credit may be further strengthened. The risk of increasing US federal government debt will lead to further damage to US dollar credit if the debt ceiling continues to rise or is monetized. The logic of gold priced in a weakening US dollar credit is expected to be further strengthened. Central banks continue to purchase gold at a steady pace, and there is still room for gold reserves to rise. In the past two years, central banks have maintained a high level of gold purchases. Countries are increasing their gold reserves to reduce their reliance on the US dollar, strengthen the credit endorsement of their overall reserves, and reduce systemic risks. The trend of weakening US dollar hegemony remains unchanged, and under this background, central banks will continue to increase their gold reserves. The endorsement of the currency attributes of gold by central banks will be further strengthened. In addition, the current SPDR Gold ETF holdings are at historically low levels, and there is still room for an increase in gold ETF holdings. Investment recommendations: Recommend focusing on companies with high cost advantages Recommend focusing on Shandong Gold Mining (01787,600547), Chifeng Jilong Gold Mining (600988.SH), and Shanjin International Gold (000975.SZ). Risk factors: 1) Overseas geopolitical influences. If there are unexpected changes in overseas geopolitical situations, it may further affect market risk aversion sentiment or demand to a certain extent. 2) Unexpected advances in overseas AI industry. If the overseas AI industry accelerates its application, the US dollar may strengthen again, and gold prices may face downward risks. 3) Safety production risks. If there are unexpected accidents in mining operations, it may have a significant impact on company profitability.