"Surging Gold and Crude Oil Prices"

Data indicates that the central bank has increased its gold reserves for the 17th consecutive month. Since November 2022, there has been a continuous increase in gold reserves over several months. As of the end of March 2024, the central bank's gold reserves reached 72.74 million ounces, marking the 17th consecutive month of increase. Rational analysis suggests that gold and crude oil will take center stage, stirring the global commodity market under the expectation of interest rate cuts in 2024.

Firstly, gold and crude oil are in the spotlight now!

Gold, as a traditional safe-haven asset, often gains favor with investors against the backdrop of increased economic uncertainty. Historically, its price has surged significantly, often accompanied by major global geopolitical crises or significant global economic developments.

The recent significant increase in gold prices is mainly influenced by the following five factors: the Federal Reserve's expectation of easing liquidity; a decline in real interest rates; an increase in demand for safe-haven assets; the trend of "de-dollarization"; and the credit risk of the U.S. government.

Crude oil, as the lifeblood of modern industry, its price fluctuations directly affect the pulse of the global economy. The recent significant increase in crude oil prices is mainly due to three reasons: changes in supply and demand relationships; geopolitical risks; and changes in inventory levels.

Secondly, will the prices of gold and crude oil continue to rise in the future?

Gold prices: On one hand, if there is a risk of economic growth slowing down or a recession, it usually increases market demand for gold as a safe-haven asset, which may support or even push up gold prices. On the other hand, the direction of the Federal Reserve's monetary policy has a significant impact on gold prices. If the Federal Reserve chooses to cut interest rates in the face of economic slowdown, this will reduce the opportunity cost of holding gold, which may drive up gold prices.

Crude oil prices: On one hand, demand affects oil prices. If the economy recovers, it may increase the demand for crude oil, thereby supporting oil prices. On the other hand, the production policies of oil-producing countries and geopolitical events will also affect the supply side. If there is tension in the Middle East, it may affect the supply of crude oil, thereby raising prices.

Thirdly, individual investment choices

Overall, petroleum and gold, in many instances, share similar attributes, being the result of the interplay of multiple factors such as global macroeconomic conditions, monetary policy, geopolitical events, and investor sentiment.Of course, due to its stronger commodity attributes and weaker physical risk-avoidance attributes, oil is more influenced by its own supply and demand than gold. As a result, under the same changes in external environments, the market does not give this commodity too high a premium because of its relatively loose supply and demand conditions.

Personally, I would be more inclined to invest in oil. On the one hand, from a full-year supply and demand forecast perspective, the current price of oil is in a relatively stable and hard-to-fall state. On the other hand, oil stocks that have been overly undervalued for various reasons in the past are prone to start a wave of price increases.