Gold price breaks through $4,800, E Fund Gold Mining ETF (2824) rises 6.8%

On the evening of April 7th, Donald Trump agreed to a two-week ceasefire with Iran on the premise of opening the Strait of Hormuz, leading to a mitigation of geopolitical risks in the Middle East. Brent crude oil plunged by over 16%. Today, London spot gold broke strongly through the $4,800 per ounce integer level, gaining over 2% intraday. During the same period, the E Fund Gold Miners ETF (2824), which tracks the Solactive Global Gold Miners Select Index, surged by 6.8%, significantly outperforming the rebound in spot gold.

The recent counter-trend strength in gold prices stems from cooling inflation expectations due to the decline in oil prices, leading to a rotation of market funds from energy assets to precious metals. Expectations for a Federal Reserve interest rate cut have further intensified. Additionally, the marginal easing of geopolitical risks has prompted some safe-haven funds to withdraw from US dollar assets. Both the US Dollar Index and real interest rates have weakened simultaneously, significantly enhancing the appeal of US dollar-denominated gold, ultimately resulting in a divergent trend of falling oil prices and rising gold.

In the short term, uncertainties surrounding the US-Iran negotiation process and the Federal Reserve's policy path will continue to create two-way volatility for gold prices, and the market may maintain a high-volatility pattern. In the medium to long term, the Chinese central bank has increased its gold holdings for the 17th consecutive month. The global trend of de-dollarization is deepening, and the certainty of declining real interest rates is strengthening, providing room for upward recovery in gold investment demand. Coupled with gold's traditional seasonal strength window in April, the current juncture is suitable for leveraging gold miner ETFs to capture the high elasticity of returns from upstream resources.

The E Fund Gold Miners ETF (2824) is currently the only ETF in the Hong Kong market focused on the global gold mining industry. Its underlying index covers 30 leading mining companies across four major producing regions: China, Canada, the US, and Australia, offering the advantages of global diversification and concentration in industry leaders. Gold mining stocks are expected to exhibit significantly higher return elasticity than spot gold during gold price upcycles, making them an efficient tool for capturing excess returns in the gold sector.