CITIC Construction Investment: The Fed's interest rate cut cycle is expected to continue.

According to Deep Tide TechFlow news on November 30, as reported by Jin10, CITIC Construction Investment Securities released a research report stating that the explanatory power of marginal demand on gold pricing has increased. Returning to the traditional logic of supply and demand, as the supply of gold is relatively stable with an annual output maintained at around 3600 tons, the true pricing variable for gold lies in demand, especially marginal demand. The demand for gold mainly consists of three parts: private sector consumption demand, private sector investment demand, and official gold purchase demand. In the past, the marginal demand for gold was primarily driven by the demand from European and American ETFs and private sector investment demand in Europe and America, mainly contributed by overseas institutional investors, while their demand or investment framework mainly depends on the real interest rates of U.S. Treasury bonds. The private sector investment demand in Europe and America, along with ETF demand, still shows a strong correlation with the real interest rates of U.S. Treasury bonds. With the decline of inflation in the U.S. and the decrease in labor market resilience, expectations for interest rate cuts by the Fed in the second half of the year are heating up. The decline in nominal and real interest rates driven by the initiation of rate cuts will inject new momentum into gold's rise.