The Zhitong Finance App learned that J.P. Morgan Chase pointed out that with the correction of the gold price after testing the $4,000 mark and the decline in the attractiveness of the stock market, the willingness of Chinese households to buy gold has clearly increased in the past two months; at the same time, the flow of GLD (gold ETF) funds diverged from the spot price of gold (XAU), and increasing gold “is becoming more and more like a problem of getting points together.”
The macro logic given by J.P. Morgan Chase is that gold can win in all three scenarios: if real interest rates and inflation both fall back, gold benefits; if inflation remains sticky and “debasement trade” (debasement trade) returns, gold also benefits; if there is a risk hedge-driven growth panic (flight-to-quality), gold benefits as a high-quality safe-haven asset.
In contrast, the only bearish logic — higher real interest rates are compounded by capital flocking to interest-bearing assets in a bullish market — but this situation is difficult to establish in the current macroeconomic environment: when 10-year US Treasury yields are close to 5%, further increases in yield are almost bound to be accompanied by higher inflation or wider credit spreads, both of which threaten risky assets.
Furthermore, this round of beta retracement has “washed” gold holdings to a low point during the year, and positions are clean. Two major structural supports are also prominent: one is that the central bank of China (PBOC) continues to buy money and the Chinese retail side's dips to form structural demand; second, the macro paradigm may change — the correlation between interest rates and AI allows the stock market to continue to rise in an environment where interest rates are controlled. Furthermore, it is worth mentioning that CTA currently also holds short positions in precious metals — that is, short compensation may also be a technical boost to the upward trend of gold.
Taken together, J.P. Morgan believes that in the four-fold context of “most scenarios win, bearish logic is difficult, positions have been cleared, and central bank and retail demand are underpinned”, the current allocation window for gold is quite attractive.