CICC: Short-term allocation value of gold outperforms other non-cash assets

Golden Ten Data reported on April 8 that CICC pointed out that in the coming months, inflation in major global economies may rise significantly, growth faces downside risks, and global assets may encounter new challenges. Compared to the period during the 2022 Russia-Ukraine conflict, current global supply chain pressures are lower, economic demand is weaker, and the absolute level of inflation is also lower. Therefore, it is expected that the current stagflation shock will mainly manifest as a temporary disturbance, inflation peaks will be significantly lower than in 2022, and global asset performance will not be as poor as it was in 2022. Based on crude oil futures forward contracts, the peak of this round of U.S. inflation is expected to occur around June, nearing 4%. CICC predicts that U.S. inflation will fall again in the second half of the year. Combined with growth pressure and financial risks, the Federal Reserve may continue to cut interest rates later in the year. In the medium term, loose monetary policy trades from the Federal Reserve are expected to return, providing new support for assets such as equities, bonds, and gold, with particular optimism for the medium-to-long-term performance of Chinese stocks. In the short term (the next 1–2 months), the market faces uncertainties, and it is recommended to maintain a certain level of cash positions. From the perspective of win rate, gold has superior short-term allocation value compared to other non-cash assets.