In the early morning of September 19th Beijing time, the Federal Reserve announced a 50 basis point reduction in the benchmark interest rate. The market had already expected the Fed to start the rate cut path in September.

While gold, as a Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.asset, has performed outstandingly in the market, its price has soared accordingly. As of now, spot gold is slightly up, quoting at $2586.97 per ounce.

Source: Wind

Against this backdrop, Agricultural Bank of China announced on its official website that it will adjust the purchase start point of RSP 2 to a floating method linked to the gold price (the purchase price of RSP during the closing period refers to the most recent effective quote), while maintaining the trading increment unit at 10 yuan unchanged. This makes it the first bank this year to link the purchase point of accumulated gold to the gold price.

State-owned large banks take action.

According to the announcement released on the official website of Agricultural Bank of China, in order to implement regulatory requirements and facilitate customers, the starting point for purchasing the bank's Cunjin Tong 2 through a fixed investment method will be adjusted to a floating method based on the gold price (the reference purchase price of Cunjin Tong during the closing period). The trading increment unit will remain 10 yuan.

When customers apply for a fixed investment, the fixed investment amount should be greater than or equal to the real-time purchase price of Cunjin Tong 2, and meet the requirements of the increment unit for fixed investment transactions (multiples of 10 yuan). For example, when the purchase price of Cunjin Tong 2 is 565 yuan/gram and the increment unit for fixed investment transactions is 10 yuan, the minimum amount that can be applied for fixed investment is 570 yuan.

From the existing information, Cunjin Tong 2 is currently a widely promoted 'accumulated gold' by domestic banks. It mainly refers to investors opening special accounts in commercial banks to purchase gold products based on fixed weight or fixed amount. After maturity, the accumulated gold can be exchanged for physical gold or redeemed, transferred, and other operations.

Cunjin Tong 2 has a lower starting point for transactions compared to Cunjin Tong 1, providing a more flexible way of fixed investment. Customers can authorize fixed investment purchases based on weight or amount, and customers can authorize fixed investment on the first 25 days of each month, which can help customers more effectively distribute the cost of purchase.

It is worth mentioning that this is not the first time Agricultural Bank of China has adjusted the starting point for accumulated gold purchases this year.

On March 22, 2024, Agricultural Bank of China announced that the starting point for purchasing Cunjin Tong 2 through a fixed investment method will be adjusted to 550 yuan. On April 9, the bank announced that the starting point for purchasing Cunjin Tong 2 through a fixed investment method will be adjusted to 600 yuan.

Institutions: The upward trend of the gold price remains unchanged.

From the beginning of this year at $2052 per ounce to the current $2587 per ounce, and even reaching a new high of $2622 per ounce, the gold price has increased by over 27% this year.

On September 19th, Beijing time, the Federal Reserve announced a 50 basis point rate cut, marking the first rate cut since March 2020. Subsequently, spot gold surged to a historical high of $2600.15 per ounce.

In addition, analysts also pointed out that the optimistic sentiment of central banks around the world buying gold in large quantities has been increasing, which is bullish for international gold prices. The rising geopolitical risks have triggered market safe-haven sentiment, increasing the demand for gold as a safe-haven asset.

From the demand side, according to the World Gold Council, the focus of gold demand in the first half of 2023 and 2024 remains on central banks' continued purchases. In 2023, global central banks purchased a net 1037 tonnes of gold, reaching the second-highest level in history, with only a decrease of 45 tonnes compared to 2022. In the first half of 2024, gold purchases reached 483 tonnes, a year-on-year increase of 5%, indicating strong global gold demand.

UBS analysts believe that the gold price can further rise and expect a target price of $2700 per ounce by mid-2025.

Under the recent driving factors of risk, we expect the demand for gold ETFs to accelerate in the coming months.

Debang Securities also stated that with the implementation of this rate cut by the Federal Reserve, if there are no new catalysts in the future, the short-term judgment is that the gold price will fluctuate around $2600 per ounce. Looking at the historical performance of the gold price during rate cut cycles, it often shows an upward trend.