2025.12.08 Gold Market Analysis and Investment Logic
1. Geopolitical tensions rise, safe-haven sentiment boosts gold prices
Recently, the radar lock incident between Chinese and Japanese military aircraft has become a focal point of market attention. The uncertainty of geopolitical events often leads to safe-haven funds flowing into gold and other secure assets. Historical experience shows that during periods of localized conflict or heightened military tension, gold prices usually receive strong support.
2. The People's Bank of China continues to increase gold reserves
The People's Bank of China has been increasing its gold reserves for 13 consecutive months, and as of the latest data, the gold reserves have reached 74.12 million ounces. This trend sends a clear signal:
• Decreased reliance on USD assets by the central bank
• Long-term optimism regarding the strategic reserve value of gold
• Provides solid bottom support for domestic gold prices
3. Fed rate cut expectations are favorable for gold
The market widely anticipates that the Federal Reserve will cut rates by 25 basis points this Wednesday (December 10), with a probability as high as 86.2%. Rate cuts typically:
• Reduce the opportunity cost of holding gold
• Weaken the USD exchange rate, boosting gold prices denominated in USD
• Enhance gold's appeal as an anti-inflation asset
4. Investment recommendations
• Short term: The combination of geopolitical risks and rate cut expectations suggests that gold prices are likely to break through key resistance levels, and trading opportunities in gold ETFs or related mining stocks can be considered.
• Medium to long term: The trend of central bank gold purchases and the global de-dollarization process provide a long-term rationale for rising gold prices.
