CICC: Under an aggressive scenario, gold's value center rises to $5,000 over the next ten years

On January 15, China International Gold Research reported that in a neutral scenario, due to the huge amount of gold reserves that Asian central banks need to replenish, and the more complicated global situation after Trump takes office, the credibility of the US dollar system will decline. We expect the central bank's gold purchase rate to remain at least as it is, that is, at around 1,000 tons/year. For US debt, we use the forecast of the US Federal Budget Committee (CRFB) benchmark scenario, and the US fiscal deficit will increase by about 7.50 trillion US dollars in the next 10 years. We also assume that Trump will not cause inflation to get out of control, the CPI will stabilize at 3% in the future, and the gold price will rise to $3,300/ounce in the next ten years. < br > < br > Under the radical scenario, assume that Asian central banks want to replenish their gold reserves faster and accelerate their gold purchases to 1,500 tons/year (too fast central bank gold purchases may raise gold prices and increase gold purchase costs, and we do not make excessive assumptions about the pace of central bank gold purchases). On the fiscal front, we assume that Trump expands his finances significantly, reaching the upper limit of the CRFB forecast, that is, adding an additional US fiscal deficit of about $15 trillion, and adopting the PIIE's inflation path forecast for Trump's shock, that is, inflation first rises to 9%, and then falls to the 3% center, calculating that the value center of gold will rise to $5,000/ounce in the next ten years. CICC recommends maintaining an overweight of gold, moderately diluting the short-term trading value of gold, and focusing on the long-term allocation value of gold.