European Natural Resources Fund: Rough estimates suggest that the gold bull market can last at least another 2 years
Li Gangfeng, an analyst at the European Natural Resources Fund, stated that the gold bull market is expected to last at least another two years. Despite most commodities entering a bear market, gold remains strong due to robust demand in the physical market. Li Gangfeng recommends strategies to be adopted after the financial markets stabilize, including shorting base metals, shorting U.S. stocks, going long on the gold-silver ratio, and holding gold and cash. The global central banks' gold purchases in the first quarter will impact the gold price performance in the second quarter. The Federal Reserve is facing dual pressures of inflation and unemployment and is not expected to cut interest rates on non-meeting days
According to the Zhitong Finance APP, Li Gangfeng, a special analyst for the European Natural Resources Fund, stated that most commodities will enter a bear market except for gold. The reason gold can currently resist "gravity" is mainly due to physical market purchases exceeding leveraged short positions in the futures market. Therefore, once the physical market's demand for real gold decreases, it may signal danger for gold prices. Even so, it is roughly estimated that the gold bull market should last at least another two years.
Li Gangfeng believes that as a strategy, at the appropriate time (for example, after the financial market stabilizes or rebounds), shorting base metals, shorting U.S. stocks, going long on the gold-silver ratio, holding gold, and cash being king are all valid choices. The amount of gold purchased by global central banks in the first quarter will affect gold price performance in the second quarter.
Last Wednesday, Powell stated that under the new policy, the U.S. will face rising unemployment and inflationary pressures, which will pose significant challenges for the central bank, as most policy impacts can only choose one between inflation and unemployment; Powell also believes that even if U.S. stocks plummet, the Federal Reserve will not suddenly cut interest rates on non-meeting days. On the other hand, there was internal discussion within the Federal Reserve about whether to stop selling bonds (the result of selling bonds is to withdraw liquid cash from the market), but they decided to maintain sales while reducing the amount sold by 75%, thus the Federal Reserve has maintained more liquidity in the market by reducing bond sales.
The probability of the Federal Reserve maintaining interest rates unchanged on May 7 rose from 55.4% three weeks ago to 89% last Friday. The market's expectation of the Federal Reserve cutting rates in June dropped from 73.7% two weeks ago to 62.5% last Friday (indicating a decrease in the likelihood of a rate cut in June)