China Merchants Securities: Three factors are expected to drive the medium to long-term gold price center upward. Current gold stock valuations remain at historical lows, and gold stock prices will later restore their correlation with gold prices

CITIC Securities stated that short-term gold price fluctuations are significant, but in the medium to long term, there are three factors that will continue to drive the upward movement of gold prices; currently, gold stock valuations remain at historically low levels, and in the future, gold stock prices will recover in line with gold prices. CITIC Securities analysts, including Zhang Xia, mentioned in their report that these three factors include: global central banks continuously purchasing gold to hedge against dollar credit risk; global gold ETFs shifting from net sellers to net buyers of gold; and market expectations that the Federal Reserve will still cut interest rates within the year, with the possibility of more aggressive cuts after a leadership change next year. Gold valuations are still at acceptable levels, and compared to theoretical calculations, there is still room for improvement in gold allocations by domestic institutions in China. Since mid-October, gold stocks have failed to follow the rise in gold prices, mainly because gold prices have surged significantly since August, leading to overbought technical indicators and a cautious equity market, causing gold stocks to peak and decline ahead of gold prices. As gold prices pull back from high levels and build a bottom, gold stocks will return to align with gold prices. Gold stock valuations remain at historically low levels, with a rolling price-to-earnings ratio of only about 30 times, and indicators excluding large-cap influences are also at historically low levels. Recommended stocks to pay attention to include LINGBAO GOLD, TONGGUAN GOLD, Zijin Mining International, Shandong Gold, Chifeng Jilong Gold Mining, Shanjin International, and China National Gold, while for silver, focus on Industrial Bank Silver and Shengda Resources