Guosheng Securities Xiong Yuan: Stocks and Commodities Are More "Seductive" in the Year of the Horse - Adjustments Are Opportunities

Recently, Guosheng Securities Chief Economist Xiong Yuan appeared on The Paper’s “Spring Water Flows East—Chief Connection” 2026 Market Outlook special, providing analysis and forecasts.

“Quality Improvement and Efficiency Enhancement” is the policy keyword

For China’s economy in 2026, Xiong Yuan stated that the first key theme is “starting well and taking good steps.” This year marks the beginning of the 14th Five-Year Plan, so at the policy implementation level, whether in reform, domestic demand, opening-up, or technology, policies related to “stabilizing growth” will be well executed.

“Returning to the economy itself, another keyword is ‘quality improvement and efficiency enhancement.’ Over the past period, policy efforts have focused heavily on ‘qualitative upgrading.’ At the same time, from the GDP growth targets of various provincial Two Sessions, it’s clear that compared to growth rate, the country is currently more focused on the quality of the economy,” Xiong Yuan pointed out.

Regarding the work of “expanding domestic demand and promoting consumption,” Xiong Yuan believes there are three main approaches: first, enabling ordinary people to have money to spend; second, creating good consumption scenarios, products, and atmospheres to encourage spending; third, making people willing to spend, which requires addressing concerns in healthcare, housing, social security, and other areas.

Specifically, for fiscal and monetary policies in 2026, Xiong Yuan reminded that a significant policy change is that the country is using acceptable methods to “inject liquidity,” whether through fiscal or monetary policy, there is a willingness to “release funds.” “Although the pace varies and the magnitude fluctuates, there is a willingness to ‘give money.’”

“Regarding policies, fiscal and monetary measures in 2025 were already very proactive and accommodative, so 2026 is likely to continue at last year’s level. In terms of fiscal ‘volume,’ funds are still sufficient; although significant cuts in costs and interest rates in monetary policy need time to materialize, the policy reserves are definitely ample,” Xiong Yuan said.

On the exchange rate, Xiong Yuan believes that the overall trend of the RMB against the US dollar in 2026 should be stable with a slight appreciation. Both from fundamental and monetary policy perspectives, the US dollar is likely to be oscillating and weakening somewhat in 2026.

Stocks and commodities are relatively more “sexy”

In terms of asset allocation, Xiong Yuan stated that he is most optimistic about stocks and commodities in 2026. “Bonds and exchange rates are not unattractive, but in terms of relative value, they are not as ‘sexy’ as stocks and commodities.”

Regarding commodities, Xiong Yuan pointed out that as early as around November 2025, he mentioned in reports that “2026 will see widespread bullish options for commodities,” and the variety is not limited to gold and silver. This year is likely to be a big year for commodities. Besides their safe-haven attributes, commodities also have industrial properties.

For gold, which hit new highs in 2025, Xiong Yuan said that looking at a longer timeline—one to two years, or even three to five years—his overall outlook for gold remains relatively positive. However, short-term fluctuations may occur due to certain factors.

“Over the past one or two years, many catalysts have driven gold prices higher, but the most core factor is related to Trump’s policies. The start of this round of accelerated gold price increases was around November 2024, coinciding with Trump’s second inauguration as US President,” Xiong Yuan further explained. “Especially the accelerated rise at the beginning of 2026, influenced by factors like Venezuela, Greenland, and the Federal Reserve’s leadership change, all have traces of Trump’s policies.”

He analyzed that the sharp fluctuation in gold prices before the Spring Festival was mainly due to the market becoming somewhat ‘crowded’ during the rapid rise, leading to a short-term “high and cold” situation.

“In the stock market, from the current point of view, the logic behind the upward trend of A-shares does not show any particularly obvious shift. The Federal Reserve entering a rate-cut cycle, the recurring activity of tech sectors represented by AI and computing power, liquidity support, and the regulatory authorities’ continued stable and active attitude towards capital markets,” Xiong Yuan said.

Therefore, Xiong Yuan stated that among the four major asset classes—stocks, bonds, currencies, and commodities—if ranked, stocks and commodities will be more “sexy” in 2026. Overall, the macro environment remains friendly to the market, so it’s good to be optimistic, ride the trend, and see adjustments as opportunities.

(Source: The Paper)