Zheshang Securities: Keep a close eye on interest rate cut trades and focus on gold opportunities
Zheshang Securities released a research report stating that the long-cycle logic of gold has not yet ended, and the downward trend of the US dollar and US Treasury credit remains the long-cycle logic for gold. Currently, US Treasuries have fallen into a cycle of high interest rates—an increase in US government interest expenditures—an increase in the US deficit—a decline in US Treasury credit—rising interest rates. When a trust crisis occurs with US Treasuries, the safe-haven value of gold sharply increases. The firm believes that this long-cycle logic is the cornerstone supporting the continued rise in gold prices, and gold is expected to continue to rise in the future. The report states that the existing short-term event catalysts for upward movement have been fully priced in, and new catalysts are needed to drive further increases. The current favorable factors mainly include: Trump tariffs, the US Treasury crisis, the Russia-Ukraine conflict, and the Israel-Palestine crisis. However, these short-term factors have been fully priced in. The breaking point lies in: the Trump administration's outrageous policies and CPI data exceeding expectations. The firm believes that interest rate cuts are favorable for gold, and that rate cuts are time-friendly. The market currently prices in a 75% probability of a rate cut by the FED in September. Looking ahead, as the tariff policy landscape gradually becomes clearer, the space for the Federal Reserve to cut rates may open up; and the high scale of US national debt urgently needs rate cuts to alleviate fiscal pressure
According to the Zhitong Finance APP, Zheshang Securities released a research report stating that the long-cycle logic of gold has not yet ended, and the downward trend of the US dollar and US Treasury credit remains the long-cycle logic for gold. Currently, US Treasuries have fallen into a cycle of high interest rates—an increase in US government interest expenditures—increased US deficits—declining US Treasury credit—rising interest rates. When a trust crisis occurs in US Treasuries, the safe-haven value of gold sharply increases. The firm believes that this long-cycle logic is the cornerstone supporting the continued rise in gold prices, and gold is expected to continue to rise in the future.
The report states that the existing short-term event catalysts for upward movement have been fully priced in, and new catalysts are needed to drive further upward movement. The current favorable factors mainly include: Trump tariffs, the US Treasury crisis, the Russia-Ukraine conflict, and the Israel-Palestine crisis. However, these short-term factors have been fully priced in. The breaking point lies in: the Trump administration's outrageous policies and CPI data exceeding expectations.
The firm believes that interest rate cuts are favorable for gold. Moreover, interest rate cuts are time-friendly, and the market is currently pricing in a 75% probability of a Fed rate cut in September. Looking ahead, as the tariff policy landscape gradually becomes clearer, the space for Fed rate cuts may open up; additionally, the high scale of US national debt urgently requires interest rate cuts to alleviate fiscal pressure
