Spot gold may present a golden opportunity for allocation. Guotai Gold ETF (518800) has three consecutive positive days, with four consecutive days of net inflows totaling nearly 600 million yuan.

Spot gold may be set to attract allocation into “gold dips.” On March 31, the Guotai Gold ETF (518800) posted three consecutive sessions of gains, with net inflows for 4 consecutive days totaling nearly 600 million yuan.

Related institutions stated that on the geopolitical front, the U.S.-Iran conflict has continued: Iran’s nuclear facilities and additional industrial facilities have been attacked; Yemen’s Houthi forces have also joined the conflict; and this may threaten shipping routes through the Red Sea. The difficulty of negotiations continues to rise, and there is currently no substantive progress. Substantive restoration of navigation through the Strait of Hormuz has not yet been restored. In the future, the conflict may trigger another round of escalation, and the risk of the war becoming prolonged is increasing. The uncertainty and continued nature of the conflict will suppress risk appetite, and gold may return to having certain safe-haven attributes.

On the macroeconomic front, the drag from high oil prices on economic growth has begun to show. In March, the combined PMI for the U.S., Europe, and Japan all fell short of expectations (Bloomberg consensus), and global growth momentum weakened slightly. After precious metals ended last week’s streak of consecutive declines since the end of March, this implies that with the U.S. dollar index stable, the gold “decline trade” logic is being warmed up.

On the liquidity front, last week, amid panic conditions in the market, gold experienced a phase of liquidity shock. However, rapid sell-offs driven by liquidity are usually not sustainable. Once market panic sentiment eases at the margin and liquidity pressure is somewhat released, gold’s allocation value is expected to gradually return, becoming a safe haven for capital again. Watch the relevant products:

Gold ETF Guotai (518800): A direct instrument to capture the gold price trend

Gold stock ETF Guotai (517400): May have a higher earnings amplification effect

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