Guosen: We continue to maintain an optimistic view on gold in the medium to long term and focus on opportunities in the third wave of the market.

Guosen released a research report stating that the opportunity for the third wave of gold may be triggered by the reflow of funds caused by the peak of the overseas artificial intelligence technology wave, but there are currently no signs of this. In 2003-2004 and 2006-2007, U.S. technology stocks and gold rose together. This same logic applies to the end of the technology wave and the surge in gold. Risk aversion has spread from geopolitical concerns to capital flows, but the third stage signal has not yet been triggered. With the decline of the three major U.S. stock indices, risk aversion is driving the gold price to continue rising. The medium to long-term price trend of gold is still favorable and appropriate in household asset allocation, with a proportion of 2-10% for gold being suitable. For institutional asset allocation, the proportion of gold assets can be moderately increased to above 10%. Guosen's main points are as follows: - Gold plays an important role in asset allocation by diversifying and hedging risks. The optimal allocation percentage for gold is currently a topic of market concern. - Ray Dalio recently suggested a reasonable allocation of 15% to gold due to the economic environment of high inflation and high government debt being similar to the 1970s. Holding cash and bonds is not an effective wealth storage method in this background, as gold is an independent safe-haven asset that can hedge against currency depreciation and geopolitical uncertainties. - Jeffrey Gundlach believes the allocation percentage can go as high as 25%, viewing gold as insurance that performs well in a negative real interest rate environment. - A linear extrapolation of gold trends from the past two years concludes that a higher allocation percentage for gold would be beneficial. - From the perspective of risk diversification, a proportion of 2-10% for gold in household asset allocation is deemed appropriate. - For institutional asset management products, the allocation percentage for gold can be moderately increased to above 10%. The long-term outlook for the gold market remains optimistic, with no clear signs of a peak. Guosen has been recommending gold allocation opportunities since the second half of 2023. The first allocation principle is based on the insufficient global safe-haven assets post the Ukraine crisis, indicating a revaluation of gold value under a reassessment of U.S. credit. The second principle is the market's perception of the Fed's credibility, triggered by Trump's pressure combined with a potential Fed rate cut in September 2025. These principles primarily revolve around the reevaluation of the value of gold under the reevaluation of the U.S. dollar's credit, with factors such as interest rates and consumption being marginal pricing considerations. Risk warnings in the report include large fluctuations in corporate earnings, uncertainty in the pace of Federal Reserve rate cuts, and escalating geopolitical conflicts overseas.