Advantages of investing in gold: in the context of interest rate cuts and the Trump deal.

We talked about several ways to build your portfolio in the US stock market last Thursday (7/11) in light of the interest rate cuts. This week, we will examine the potential for investing in gold.

Since March of this year, gold has been steadily climbing and broke through several key price levels after reaching a historic high on March 6th. Following a period of consolidation between mid-April and June, gold prices surged again in July, approaching the $2,500 per ounce mark on Tuesday (7/16). The prices in New York and London also reached historic highs, breaking out of a three-month consolidation period.

The rise in gold prices can be attributed to various factors, including the market's expectations of a Fed rate cut, geopolitical tensions, consumer demand, and central bank buying.

Of these factors, the most significant is the market's belief that a Fed rate cut will occur in September, with a probability of 91.7%. This probability has increased significantly from just a week ago when it was only 70%. Additionally, recent inflation data has bolstered the Fed's confidence, and several high-ranking officials have expressed optimism about inflation, suggesting that a rate cut may be imminent.

As the possibility of Trump's return to the White House grows, "The Trump Trade" effect is boosting gold prices. Analysts see gold as a relatively safe bet against the instability linked to his potential presidency.

Analysts across various industries are optimistic about the future trend of gold.

Bank of America believes that gold prices will increase to $3,000 in the next 12-18 months.

Citibank's report suggests that the growing trend in gold consumption could lead to record-breaking spot prices of $2,400-$2,600 per ounce in the latter half of 2024. The report also indicates that the target price for gold in mid-2025 is $2,800-$3,000 per ounce.

For both short-term hedges and long-term outlooks, investing in gold is a savvy choice potentially.

So how can we invest in gold? The first method is to invest in stocks related to gold. To do this, we can go to moomoo > Industry Chain > Gold to find out about companies related to gold and invest in their stocks.

Another method is to invest in gold-related ETFs.

Investing in gold through ETFs is usually more convenient, transparent, and cheaper than investing in physical gold directly. Gold ETFs track gold prices, are linked to physical gold, and do not pay dividends.

ETFs invested in gold can be divided into two categories according to their underlying assets: gold ETFs and gold miner ETFs, which are essentially different.

Gold ETFs are backed by a basket of physical gold or gold futures, while gold miner ETFs are supported by a basket of gold mining companies stocks.

However, it comes risks with higher price volatility, additional costs, no physical metal.

With moomoo, you can quickly find gold and gold miner ETFs and view detailed information on each ETF. To find Gold ETFs on moomoo, you can go to Markets > ETFs > Gold ETFs

Due to recent interest rate cuts and the "Trump Trade", gold has become a relatively stable investment option and is currently experiencing an upward trend. However, the stock market is volatile, so investors need to consider their financial situation and risk tolerance before investing in gold. It is crucial to analyze one's own situation to determine if investing in gold is suitable.

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