Spot gold surges! Several brands are planning a new round of price increases. Is there support for the market outlook?

On February 27, international gold prices continued their upward trend, with spot gold once again reaching $5,200 per ounce during trading.

Gold stocks also strengthened in tandem, with increased sector capital activity. The gold market extended from the futures and spot markets to equities and consumption sectors. Many brands of pure gold jewelry are preparing for a new round of price hikes, gradually lengthening the transmission chain of the market.

Meanwhile, the capital structure and institutional analysis also support gold. Leading gold ETFs continue to expand, and several public fund institutions point out that central bank gold purchases and the weakening of US dollar credit remain the main long-term themes. After experiencing short-term fluctuations, the structural support for gold prices remains unchanged, highlighting gold’s asset allocation attributes once again.

Spot Gold Reaches $5,200 Again

On February 27, international gold prices maintained their strong momentum, with spot gold once again hitting the $5,200 per ounce mark during trading. The previous day, gold prices also briefly surpassed $5,200 per ounce, with a total increase of over 3% compared to before the Spring Festival, significantly raising the price center. After experiencing short-term fluctuations, gold assets have once again become a market focus.

In the equity asset sector, gold stocks also rose in unison. Hunan Gold hit the daily limit, while Huayu Mining, Zhuyé Group, Hengbang Co., Ltd., and Xiaocheng Technology also saw collective gains, with sector capital activity clearly increasing. The market sentiment’s recovery further strengthened gold’s appeal as a safe-haven and an asset for allocation.

At the same time, the impact of rising gold prices has gradually extended to the end consumer market. Driven by the continuous rise in international gold prices, domestic mainstream pure gold jewelry brands are preparing for a new round of price increases, with several leading brands announcing price hikes. Retail price adjustments indicate that the gold market is extending from the financial market to physical consumption, with price linkage effects becoming more apparent.

Regarding ETF scale changes, despite gold price fluctuations, the scale of gold ETFs continues to grow steadily. As of February 26, over the past month, leading gold ETFs have maintained growth. Guotai Gold ETF, Hu’an Gold ETF, Huaxia Gold ETF, and ICBC Credit Suisse Gold ETF increased by 5.966 billion yuan, 3.641 billion yuan, 1.768 billion yuan, and 1.162 billion yuan respectively. Since the beginning of the year, Hu’an Gold ETF, Guotai Gold ETF, and Bosera Gold ETF have each increased by over 10 billion yuan.

Structural Factors Supporting Gold Prices Remain Unchanged

Many public fund institutions believe that although gold prices have experienced short-term fluctuations, the core variables supporting gold have not fundamentally changed.

BOC Fund analysis states that overall, short-term gold prices are expected to remain volatile but slightly strong, with continued attention to geopolitical and trade events. In the medium to long term, central bank gold purchases and the weakening of US dollar credit remain the main themes. China’s central bank has increased gold holdings for 15 consecutive months. Goldman Sachs predicts that global central bank gold purchases will accelerate by 2026, and the weakening of US dollar credit may enhance gold’s allocation value. For investors, it is important to focus on signals of declining gold volatility and consider gold’s investment value from a portfolio perspective.

Hu’an Fund analysis notes that the tariffs previously imposed by the US on global imports were deemed illegal. After these tariffs are abolished, it will reduce US government revenue and increase concerns over US debt burdens; simultaneously, it will ease domestic inflation in the US and open space for the Federal Reserve to cut interest rates. These factors could be positive for gold.

Looking ahead, after a period of fluctuation and adjustment, gold prices are gradually showing signs of stabilization, with volatility significantly decreasing. The value of gold as an asset allocation is gradually emerging. It is recommended to participate in gold investment with a prudent macro asset allocation approach.

In the medium to long term, the macro structural factors supporting gold have not undergone fundamental reversals, including: ongoing global central bank gold purchases under de-dollarization, the erosion of US dollar long-term credit due to “fiscal-led” policies, and systemic risks caused by fragmentation in the global geopolitical landscape. Gold’s role in hedging “risks of collapse of the international order” and “sovereign credit currency risks” is increasingly prominent.

(Source: Securities Times)