Gold prices are hitting new highs, making it a good time to invest in quality assets on dips.


The market has fluctuated above 3,000 points, indicating a first wave of gains after bottoming out pre-Spring Festival. With an eight-day rally, the Shanghai Composite regained the 3,000-point level. It is now preparing for a second upward wave.

The market showed repeated fluctuations above the 3000-point mark, marking the first wave of attack since the market bottomed out before the Spring Festival. The Shanghai Composite Index recovered the 3000-point mark through eight consecutive gains. After this period of fluctuations, the market is brewing a second wave of attack.

In the medium to long term, the current market is still at a historically low area. The PE ratio of the CSI 300 is close to its historical lowest valuation, far below the historical average. Indicators such as the issuance volume of new funds nearing freezing point and a decline in transaction volume in both markets show that the current market still exhibits characteristics of a bottom zone. From the perspective of economic transformation, the growth of many traditional industries has fallen, such as the real estate industry chain, which has seen a significant decline due to the downturn in the real estate market. In contrast, some emerging economies have seen continuous growth, for example, exports of the new triad: new energy vehicles, lithium batteries, and photovoltaics grew by 30% last year and maintain fast growth this year. In terms of new energy vehicle sales, China's new energy vehicle sales last year broke through the 9 million mark, accounting for more than 30% of total vehicle sales, and the industry structure is gradually stabilizing, with leading companies accounting for 30% of market share. Some new car-making forces have turned losses into profits and achieved tens of billions in net profit, indicating that new energy vehicles, as a direction with better growth in the manufacturing industry, have driven the related industrial chain to recover, markedly different from the real estate industry chain.

During this period, gold prices have seen a rapid rise, with international gold prices breaking new highs to stand above 2300 US dollars per ounce, and domestic gold prices also hitting new highs. The rise in gold prices is related to various factors, including international turmoil, the potential escalation of the situation in the Middle East, and a long-term trend in the Russia-Ukraine conflict, all of which affect the safe-haven sentiment and push up gold prices. With the US facing a slowdown in economic growth, the probability of future rate cuts is high. The signal from Federal Reserve Chairman Powell that there will be an opportunity for rate cuts in the second half of the year also pushed up gold prices. Central banks of various countries, including the People's Bank of China, have increased their physical gold reserves, raising gold demand. The rise in gold prices has also stimulated investment demand, with many investors buying gold jewelry and gold-related products, driving up gold prices. Therefore, gold prices are expected to continue a strong upward trend for a long time. During past market adjustments, I also suggested that physical gold or gold ETFs, gold stocks, and gold funds could be used to hedge portfolio risks. This has proven to be a good investment strategy, now effective.

April is a busy period for the disclosure of quarterly and annual reports. Companies with excellent performance will see good rebound opportunities. For instance, brand liquor has recently experienced a rapid rebound, and Monday's decline was temporary. In the medium to long term, brand liquor leader stocks with brand value have long-term investment value. Consumer blue-chip stocks have strong profitability and are expected to overcome economic cycles, bull and bear cycles. It is advised to maintain confidence and patience.

During the holiday period, US Treasury Secretary Yellen's visit to China attracted widespread attention from the market. Yellen's speech was relatively neutral, explicitly stating that the economies of China and the US will not decouple. Economic and trade relations are ballast stones. Chinese Premier Li Keqiang and Vice Premier Han Zheng met with Yellen, sending positive signals and expressing our sincerity. We hope that China and the US will move towards each other in economic, trade, and other aspects of relations, which is beneficial to the people of both countries and the recovery of the global economy. The China-US trade relationship is the world's largest trade relationship, with a strong foundation for cooperation, and given its complementary and competitive nature, there is still a lot of room for growth in the future.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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