Zhongtai: Gold continues to hit new highs. This round of price increases is supported by structural factors.

Zhongtai released a research report stating that on April 22, spot gold broke through the level of $3480 per ounce, COMEX gold broke through the level of $3490 per ounce, both hitting record highs. Considering that speculative positions on the New York Mercantile Exchange are still at moderate levels, this round of gold price increases has structural support. The momentum structure of gold is good, and even if there is a short-term pullback later, it does not change its long-term investment value. Zhongtai's main points are as follows: The initial drop in gold after the announcement of "tariffs" was not due to short positions After the announcement of the "tariffs" on April 2, the price of gold initially declined, with London gold falling continuously from April 3 to April 7. According to data from the U.S. Commodity Futures Trading Commission (CFTC), the decline was not caused by short positions, but by forced liquidation triggered by additional margin calls. However, after April 8, gold resumed its upward trend and rose by 9.63% as of April 17. Gold's recent rise is not due to speculators Recently, the amount of long gold positions on the COMEX has remained relatively stable, and this round of increase did not accompany a large influx of speculative funds. Gold exchange-traded funds (ETFs) saw net inflows since April 8, with a total flow of about 52.1 tons from April 4 to April 11. Net inflows mainly occurred in North America and Asian markets. However, the price trend indicates that this round of gold price increase is mainly driven by the Eastern markets, as price fluctuations mostly occur during the Asian trading sessions. Is it Japanese long-term funds buying gold? Zhongtai pointed out that Japanese realmoney, represented by life insurance companies, is an important force behind the recent selling of U.S. bonds. This was also confirmed in the latest data from the Japanese Ministry of Finance, but Japanese long-term funds are more likely to sell U.S. bonds to buy Japanese bonds rather than gold. This gold price increase may be due to central bank purchases Up to April 11, gold demand was mainly coming from domestic ETFs, with data from the Gold Association showing that four of the top ten gold ETFs in terms of fund inflow are from China. However, during the rise in gold prices, it was observed that the Shanghai gold premium turned negative at the most dramatic increase in gold prices, especially on April 11 and 16. These price fluctuations resulted in a significant increase during trading sessions while the Shanghai gold premium did not change. This indicates that the current rise may be mainly driven by purchases from the People's Bank of China. Since it can trade directly in the London over-the-counter market (OTC), it does not affect the Shanghai Gold Exchange premium. On April 21, the People's Bank of China, the China Banking Regulatory Commission, the State Administration of Foreign Exchange, and the Shanghai Municipal Government jointly issued the "Action Plan to Further Enhance the Facilitation of Cross-Border Financial Services in Shanghai International Financial Center." The document mentions the need to strengthen the function of key financial platforms to allocate global resources, establish a high-level international financial asset trading platform, and become an important functional platform for allocating global financial resources and facilitating deep participation of international investors in the Chinese financial market. It also supports the Shanghai Gold Exchange and other exchanges in cooperation with overseas exchanges to expand the application of the Renminbi benchmark price in international mainstream markets, and explore the internationalization of specific products for delivery on the Shanghai Gold Exchange, and set up overseas delivery warehouses. Risk warning Model deviation risk; risk of outdated information and data updates in the research report; policy surprises.