Everbright Securities: Gold's upward logic has not changed and continues to be optimistic about gold stocks

The Zhitong Finance App learned that Everbright Securities released a research report saying that gold prices at home and abroad have recently declined after reaching new highs. On April 22, 2025, the closing price of SHFE gold was 831.4 yuan/g, and London gold was now 3433.6 US dollars/ounce, all of which reached record highs. As of April 23, the closing price of SHFE gold was 784 yuan/g. London gold is now 3,263 US dollars/ounce, down 5.7% and 5% from the previous day. Affected by the easing of trade conflicts in the short term, gold prices have recovered somewhat, but the upward logic of gold has not changed. Continue to be optimistic about gold prices and gold stocks, and focus on stocks with high performance flexibility.

The main views of Everbright Securities are as follows:

The credit of the US dollar weakens, and the monetary properties of gold have strengthened

On April 2, 2025, after the US proposed imposing “equal tariffs” on all trading partners, while US stocks fell and US bond yields rose, the dollar, the most liquid safe-haven asset, depreciated. This is clearly different from the increase in US bond yields and the simultaneous appreciation of the US dollar as shown by the Sino-US trade conflict in 2018. The bank believes it is mainly because the current US trade conflict with all trading partners has had a partial impact on the US dollar credit system, and US dollar assets have been sold off. Against the backdrop of failure to form a new global monetary system, the monetary properties of gold will continue to rise, and demand for gold allocation will increase significantly.

Demand for allocation and investment increased, and Asian gold ETFs increased their holdings at an accelerated pace in April

Since May 2024, there has been a marked increase in gold allocation and investment demand. By the end of March 2025, global gold ETF holdings were about 3445.3 tons, up 365.6 tons from the end of April 2024, an increase of 12%; while the total increase in 2025Q1 was 226 tons, accounting for 62% of the aforementioned increase, showing signs of acceleration since 2025. The increase in Asian gold ETF holdings accelerated significantly in April. Taking the week of April 18 as an example, Asian gold ETF holdings increased by a total of 15.8 tons, accounting for 47% of the 33.4 ton increase in global holdings during the week; while Asian gold ETFs increased their holdings by a total of 9.5 tons in March.

The long-term growth cycle of global central banks is expected to continue

Against the backdrop of geopolitical influence, de-dollarization, and global economic uncertainty, central banks around the world are more willing to increase their gold holdings. The Central Bank of China began increasing its holdings again in November 2024. As of the end of March 2025, the monthly holdings were 5.1, 10.6, 5.1, 5.1, and 2.9 tons, respectively. From January 2022 to March 2025, of the increase in global central bank holdings, China increased its holdings by 355.6 tons, Poland by 249 tons, Turkey by 231.5 tons, India by 131.4 tons, Singapore by 66 tons, Iraq by 66 tons, Qatar by 57 tons, Egypt by 47 tons, the Czech Republic by 44 tons, and Jordan by 29 tons. China accounted for about 26% of the increase in holdings.

Divergence and recovery between gold stocks and gold prices

The divergence between the price of gold and gold stocks has occurred many times in the past two years, all during a period of sideways fluctuation after the price of gold hit a record high. The main reason is that after the gold price fluctuated sideways at a new high price, the market had doubts about the sustainability of high gold prices; moreover, when commodity prices were at record highs, the equity market was prone to a “rush” phenomenon. For example, gold prices fell sideways in June 2023, January 2024, September 2024, and February 2025, etc., but as gold prices continued to rise after this period, gold stocks were repaired through a sharp rise in the relationship with gold prices.

Risk warning: Global central bank holdings fall short of expectations; trade conflicts mitigate risks.