Guoyuan Securities: Focus on changes in the supply and demand structure, and the long-term allocation value of gold is showing

The Zhitong Finance App learned that Guoyuan Securities released a research report saying that gold itself does not generate interest, and holding costs are an important factor in analyzing its allocated value. Central bank allocation demand is still there, but net buying intensity has not continued to rise. Ultimately, resource endowments need to be reflected in profit through economic mining, continuous production, and cost control. The response of jewellery demand to prices and consumer budgets is not the same as investment demand. The bank recommended focusing on resource development capabilities, cost control and project implementation.

Guoyuan Securities's main views are as follows:

Interest rates and the US dollar are rising, and gold pricing needs to pay attention to holding costs

Gold itself does not generate interest, and holding costs are an important factor in analyzing its allocation value. As of October 23, 2026, the London gold spot closing price was 3995.38 US dollars/ounce, down 7.62% from the end of 2025; the US 10-year real Treasury yield was 2.66%, up 73 basis points from the end of 2025; and the US dollar index was 101.7520, up 3.54% from the end of 2025. Both the US dollar and interest rates form constraints that require attention at this stage, but gold is also affected by factors such as central bank allocation, investment capital, and risk appetite, and changes in the US dollar cannot be mechanically converted into gold price predictions. The total net purchases of the central bank in the first half of 2026 were 345.38 tons, down 16.52% from the same period in 2025. Central bank allocation demand is still there, but net buying intensity has not continued to rise. Pricing analysis requires further distinguishing between the central bank's net purchases, gold reserve stocks, and ETF investment requirements, and observing their changes separately.

Gold supply is growing moderately, and the conversion of resources into production is still constrained

In the first three quarters of 2026, mineral gold supply was 2929.87 tons, up 1.76% year on year; recycled gold supply was 1008.71 tons, down 2.82% year on year; producer hedging was -57.14 tons, and total supply was 3881.44 tons, a decrease of 0.06% year on year. Mineral gold and recycling supply have different response mechanisms: increasing mine production depends on construction and operation, and recycling supply is affected by holders' monetization and recycling channels. Ultimately, resource endowments need to be reflected in profit through economic mining, continuous production, and cost control. From exploration to construction, trial production and stable operation, the project involves many factors such as quality, recovery rate, capital investment, licensing conditions, and production organization.

Demand for jewellery is under pressure, and demand for new ETFs was weak in the first half of the year

The response of jewellery demand to prices and consumer budgets is not the same as investment demand. In the first three quarters of 2026, the total quarterly demand for jewelry was 982.94 tons, down 18.68% from 1208.77 tons in the same period in 2025. In the first three quarters of 2026, demand for technology was 247.91 tons, up 2.59% year on year, showing a different trend from the decline in jewellery demand during the same period. The confirmed investment demand was 1279.56 tons, down 20.32% from 1605.95 tons in the same period in 2025. ETF investment demand for the first quarter, second quarter, and third quarter was 62.4 tons, -47.3 tons, and 211.9 tons, respectively, totaling 227 tons, down from 627.6 tons in the same period in 2025. New ETF demand in the first three quarters was weak. The average daily trading volume of global gold ETFs rebounded to US$7.12 billion in September 2026, which is still below the level of US$22.78 billion at the beginning of the year. The transaction amount reflects the size of the transaction, and the direction of capital allocation still needs to be judged based on net inflows and changes in positions.

Investment advice

It is recommended to focus on resource development capabilities, cost control and project implementation. Zijin Mining focuses on tracking global gold growth and mergers and acquisitions; Hunan Gold focuses on self-production recovery, antimony-tungsten business and restructuring progress; CICC Gold focuses on gold and copper mine operations and transformation of the Shaling project; Shandong Gold focuses on production recovery and domestic and overseas project construction. Profit elasticity is assessed based on each company's mineral structure, equity caliber, and capital expenditure, and the degree of valuation matching under changes in gold prices is examined.

Risk Alerts

Gold prices fluctuate, allocation requirements are weaker than expected, mine safety and environmental protection and operational risks, project construction and mergers and acquisitions integration fall short of expectations, cost and exchange rate fluctuations, and changes in overseas policies.