Gold prices experience a "Deep V reversal" as precious metals surge significantly, with Chifeng Gold rising over 7%

(Source: 财闻)

          Domestic branded gold jewelry prices were adjusted twice intraday. Brands such as Chow Tai Seng and Lao Miao Gold saw the price of fine gold jewelry rise by 10-12 yuan per gram intraday.            

March 30, the precious metals sector continued to strengthen. Zijin Mining (600988.SH) rose more than 7%, while Shandong Gold (600547.SH), Shanjin International (000975.SZ), Zhaojin Gold (000506.SZ), and China Gold (600489.SH) also followed higher.

On the news front, spot gold prices saw a deep V-shaped reversal during the morning of the 30th. During the session, they rebounded rapidly from the lows and moved close to 4500 dollars per ounce. At the same time, domestic branded gold jewelry prices were adjusted twice intraday; brands such as Chow Tai Seng and Lao Miao Gold saw the price of fine gold jewelry rise by 10-12 yuan per gram intraday.

CITIC Securities said that after past Middle East conflicts, the medium-term trend of gold prices has still depended on U.S. dollar credit and liquidity factors. Looking ahead to this round of conflict, it is expected that the continuation of two major trends—looser liquidity and weakening U.S. dollar credit—will continue to push up gold prices. Historically, valuation advantages or the advantages of stock price percentile positions would reinforce the upside space for the gold sector. Currently, the PE valuation level of leading companies has fallen back to 15—20x, a historic low. Meanwhile, considering that in recent years stock price highs and gold price highs have been highly synchronized, it is expected that a new high in gold will drive a new high in stock prices.

Founder Securities said that in the short term, gold prices are still suppressed by factors such as the rise in real interest rates and a relatively strong U.S. dollar, so prices may see increased volatility and even a phased pullback. However, the long-term support logic remains fairly clear. The key support range below the current gold price is roughly 4400—4600 dollars per ounce. If the price retraces to this range, it usually means there is still strong support/consolidation from below. But against the backdrop of rising geopolitical risk and increased demand for safe-haven assets, in the short term there remains the possibility that gold prices could probe again toward around 5500 dollars per ounce. In the medium term, gold is likely to show a pattern of high-level consolidation with a positive bias, and the trading range may be concentrated at 4750—5500 dollars per ounce. In the long term, supported by factors such as a weaker U.S. dollar, falling real interest rates, inflows into ETF funds, and improved allocation demand, it still has strong strategic allocation value. In an optimistic scenario, the gold price center could also move higher further.

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