Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.

Statistics show that last week, the usd rose from a low of 106.10 to a peak of 108.09 during Friday's trading session, reaching a new high since October 2023. Despite the strong usd, international gold prices maintained an increase for five consecutive days, with a cumulative rise of nearly 6%, the largest weekly increase since October last year. Previously, the domestic gold monthly increase in October was 6.5%.

International gold prices have risen above 2700 usd/ounce, and the price in the gold trinket market has also surpassed 800 yuan/gram. Additionally, gold etf products have seen sustained inflow of funds. Goldman sachs' latest report believes that gold is the top choice to combat inflation and geopolitical issues in 2025, regarded as the preferred asset to respond to tail risks (such as tariff escalation, geopolitical conflicts, and concerns over us debt default).

The average price of gold trinkets has returned above 800 yuan/gram.

With domestic and international gold prices rising nearly 6% weekly, the gold trinket market price has also once again surpassed 800 yuan/gram. On the 23rd, brands such as chow tai fook and liu fu jewelry saw gold prices break through 812 yuan/gram, while chow sang sang's gold price reached 814 yuan/gram.

Last week, the usd rose from a low of 106.10 to a peak of 108.09 during trading on the 22nd, reaching a new high since October 2023. Although the strengthening usd and lowered expectations for us interest rate cuts put pressure on gold, geopolitical factors have once again become the driving force behind gold prices. The escalating situation between Russia and Ukraine has ignited global interest.Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.Sentiment drives gold prices higher. The fear index in the usa has been rising again since November 14, coinciding with the recent upward turn in international gold prices.

Previously, under the strong rise of the usd, gold prices continuously adjusted downwards for half a month from October 31 to November 15, with a decline of over 9%. During this period, the usd soared from 103 to above 107, with an increase of 2.51%.

On October 31, after international spot gold reached a historical high of 2790.07 usd/ounce, it made a "sharp turn". By November 14, international spot gold fell to a low of 2536.66 usd/ounce, a decline of nearly 9%. At the same time, domestic spot gold, the price of Au99.99 on the shanghai gold exchange, also dropped from a historical high of 655 yuan/gram on October 31 to 589 yuan/gram, a decline of 10%.

Geopolitical conflicts intensify, increasing market demand for safe haven.

Currently, both foreign and domestic institutions remain highly bullish on gold assets. Goldman sachs has listed gold as the most noteworthy commodity for 2025 in their latest report and predicts that with the normalization of demand from investors and institutions, gold prices will rise above 3000 usd/ounce by December next year.

Goldman sachs believes gold is viewed as the preferred asset to counter tail risks (such as tariff escalation, geopolitical conflicts, concerns over usa debt defaults, etc.), and it is the unmatched 'TopTrade' choice for dealing with inflation and geopolitical issues. In scenarios where trade tensions escalate or fiscal sustainability raises market panic, gold prices may rise further, even exceeding Goldman sachs' baseline forecast. "If concerns about usa fiscal sustainability intensify, we estimate that gold prices will further increase by 5% to 3150 usd by December 2025."

The active positioning of institutional investors to accumulate on dips is also one of the reasons driving gold prices up, with ETF gold holdings gradually increasing. Data shows that last week, the world's largest gold ETF — SPDRGoldTrust (GLD) gold ETF fund's holdings continued to rise, with holdings increasing by 8.04 tons to 877.97 tons on November 21 from November 15. Meanwhile, the chinaamc gold etf (518850), which tracks the spot price of gold in live trading on the shanghai gold exchange, saw its holdings increase by 18.3 million shares to 0.17 billion shares on November 22 compared to November 15.

Inflation and safe haven remain the focus of gold trading.

Looking ahead, the risk-hedging function and global inflation issues may continue to be the focus of the gold market. Goldman Sachs pointed out that potential interest rate hikes and the appreciation of the dollar remain the main risks facing the rise in gold prices.

Based on the commodities in the USA.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.According to the data from the Commodity Futures Trading Commission (CFTC), as of the week ending November 19, speculative traders have increased their long positions in the dollar to a new high since June. Meanwhile, net long positions in precious metals, copper, and other commodities are being reduced. The data shows that as of the week ending November 19, speculators held COMEX gold net long positions decreased by 7,038 contracts to 190,324 contracts, reaching a 15-week low. Speculators held COMEX silver net long positions increased to 25,896 contracts, with the absolute long value reaching a 14-week low. The net long positions held in COMEX copper decreased to 10,214 contracts, also reaching a 14-week low.

The UBS analyst report suggests that before gold rises again, it may experience a consolidation period due to the strengthening of the dollar and concerns that more U.S. fiscal stimulus could lead to rising interest rates. BMI analysts believe that one of the significant downward risks for gold in 2025 is that in the event of renewed inflation, the Federal Reserve may adopt a more cautious approach to interest rate cuts, which is a disadvantage for gold. However, BMI believes that in the longer term, gold prices should remain at high levels.

Analyst Zhang Chen from Yide Futures believes that attention should be paid to the negative impact on the economy and inflation after the final implementation of a new round of tariffs in the USA, as the uncertainty of the impact range also determines the uncertainty of the interest rate cut cycle, which may exert temporary pressure on gold. However, overall, under the current circumstances of tense geopolitical situations and central banks in various countries valuing and continuously buying gold reserves, the basis for the current gold bull market still exists. Even if it faces temporary headwinds in the future, it should be regarded as a correction in the upward process.

Editor / jayden