As learned from the Wisdom Wealth APP, the market's expectation of a September rate cut by the Federal Reserve has strengthened, and the boost from the assassination of Trump last weekend has continued to drive up the price of gold. On July 16th, COMEX gold rose 1.84%, hitting a historical high of $2474.8 per ounce during the session.

Key data was released by the US last night. The month-on-month rate of business inventories in May increased by 0.5%, exceeding expectations of 0.4% and the previous value of 0.3%. This data shows the largest increase since August 2022. The July NAHB Housing Market Index in the US was 42, expected to be 43, and the previous value was 43. This data indicates the lowest level since December 2023. Both of these data sets are bullish for precious metals markets.

Recently, the US Department of Labor released the June 2024 CPI data, which showed that the US consumer price index (CPI) rose 3.0% year-on-year in June, which was a decrease of 0.3 percentage points from May. The monthly change of the US CPI in June decreased by 0.1% compared with the previous month, the first time in four years that it has been negative.

After the CPI data was released, there was a significant change in market sentiment. According to the CMEFedWatch tool, the probability of a rate cut in September has risen from 70% before the data was released to 93%. It is expected that there will be an additional rate cut in December. This change in expectations has provided significant support for the gold price.

In addition, on July 15th, local time, Federal Reserve Chairman Powell said at a Washington economics club event that the Federal Reserve will not wait until the inflation rate drops to 2% before lowering interest rates. The three US inflation data in the second quarter of this year did increase confidence to some extent, that is, the rate of price increases is recovering sustainably towards the Federal Reserve's target.

This statement further solidified the expectation of a rate cut, and investors are waiting for more US economic data to obtain further monetary policy signals. According to the media quoting WisdomTree's senior commodity strategist Nitesh Shah, the uncertainty surrounding the long-term wait for a US rate cut may push the gold price down in the third quarter, and then accelerate the rebound, pushing the gold price to a new high.

Last weekend, the attack on President Trump became a new variable in the market, and the uncertainty of the US election caused safe-haven assets to heat up, making the bullish momentum of gold and precious metals even stronger. Paul Marino, Chief Revenue Officer of GraniteShares, said: 'In times of uncertainty and volatility, you invest in gold, and that's exactly where we are now. People continue to use gold as a safe haven and store of value. Price forecasts are difficult to be accurate, but seem to be steadily rising.'

Central banks around the world are still planning to reserve gold on a large scale, which is also one of the main driving forces for the rise in gold prices. According to the World Gold Council's 2024 Central Bank Gold Reserves (CBGR) survey, 29% of central bank respondents plan to increase their gold reserves in the next 12 months, the highest level seen since the survey began in 2018. Among them, emerging markets are particularly active in increasing their gold holdings.

Huatai Securities believes that when the "Trump trade" and the "rate cut trade" both strengthen, the "weak resonance" favors US large-cap technology stocks, Japanese stocks, steel and other assets. If a "strong resonance" occurs, assets such as bitcoin and gold may be favored, and the yield curve of US bonds will also become steeper.

According to a report by Citibank, the trend of increasing gold consumption in 2024 is boosting spot trading to reach a record high of $2400-2600 per ounce in the second half of 2024; the target price for gold in mid-2025 under benchmark circumstances is $2800-3000 per ounce.

In addition, according to the latest research report from UBS, investors still have a strong interest in buying gold on dips, and there is still room for gold to rise. It is recommended to increase gold holdings.

Related concept stocks:

Zhaojin Mining (01818): In early July, UBS released a research report, initially rating Zhaojin Mining as a "buy" and a target price of HKD 17.9. The bank expects gold prices to remain strong and stable from 2024 to 2026, and has raised its gold price forecast to $2,365 to $2,775 per ounce. The bank's model also shows that in the past three years, Zhaojin has been the most sensitive stock to gold prices among all AH stocks and gold stocks.

Zijin Mining Group (02899): In July, UBS released a research report recommending a 'buy' rating for Zijin Mining Group. The company's gold production in the first half of this year was approximately 35.4 tons, a YoY increase of 9.6%, and copper production was approximately 0.518 million tons, a YoY increase of 5.3%. The increase in prices and improvement in cost control have brought surprises to the results. Due to better-than-expected performance, the bank expects a positive market response, with a target price of HKD 22.3.

China Gold International (02099): In April, China Merchants (Hong Kong) released a research report stating that due to the high level of PE valuation, the target price for China Gold International was raised to HKD 56.10, and the 'accumulate' rating was maintained. The bank predicts that the company's net income will steadily increase from 2024-2026, mainly driven by the increase in metal prices and mineral product production.

Lao Piao Gold (06181): In July, China Merchants released a research report covering Lao Piao Gold for the first time and rated it as a 'strong recommendation'. The company's performance grew rapidly last year with a 146% increase in revenue and a 340% increase in net income. With the large potential in the ancient gold market and high-end jewelry market, the company has growth opportunities.

Shandong Gold (01787): In mid-July, Morgan Stanley released a research report maintaining a 'synchronized with the market' rating for Shandong Gold. Although the company maintained strong growth in gold in the first half of the year, with a profit increase faster than the first quarter's 59%, it noted that the company's profit performance was flat or declined during the rise in gold prices in the second quarter, with relatively inferior results. The target price is HKD 20.2.