Gold prices are currently being driven by two opposing forces: on one hand, elevated long-term U.S. Treasury yields and a strong dollar index continue to weigh on gold valuations; on the other hand, notably weaker non-farm payrolls and rising international oil prices are lifting inflation expectations, prompting the market to trade gold's stagflation-hedge properties, which pushed gold prices up to $4,194 last week.
The September CPI data scheduled for release on October 14 will serve as the key observation point to verify whether the stagflation logic can persist. Amid the interplay of multiple macroeconomic factors, the long-term allocation value of gold continues to stand out, and the gold mining sector, known for its high elasticity, has drawn considerable market attention. As a core vehicle for gaining exposure to the gold mining sector, E Fund Gold Mining ETF (02824) covers global leading miners, making it a quality tool for investors seeking to capture the dividends of the gold market rally.
Currently, long-term U.S. Treasury yields are running at multi-year highs. Constrained by factors such as fiscal deficit expansion and increased debt supply, even if the Federal Reserve pauses rate hikes later, a decline in long-end rates will still face strong resistance, constituting the primary external pressure on gold. On a technical level, gold prices have retraced significantly from historical highs, implied market volatility has eased somewhat, and the $4,100 level also serves as a key support platform formed by previous trading activity. From a risk-reward perspective, after multiple bearish factors have been fully digested, gold prices have not refreshed their recent lows, and bottom-fishing forces are gradually emerging. Long-end rates are at extreme highs and inherently possess the possibility of a marginal turn. Once U.S. Treasury yields and oil prices decline subsequently, room for gold price recovery will open up, and the $4,100 level offers favorable medium-to-long-term allocation value.
It is particularly worth noting that gold miners possess 2-3x natural operating leverage. If gold prices resume their uptrend after consolidating at the bottom, the earnings elasticity of miners will be significantly higher than that of spot gold, with greater recovery potential. On October 14, the U.S. September CPI is the core indicator to watch this week, directly determining the subsequent direction of stagflation trades. Following the policy transmission logic, if core inflation slows marginally as expected, the consensus that the Fed will hold rates steady in October will essentially be confirmed, and December rate hike expectations will cool in tandem, with real rates peaking and declining to provide support for gold prices. If core inflation shows strong stickiness, the market will further reinforce December rate hike expectations, long-end U.S. Treasury yields will continue to rise, and gold prices will face valuation pullback pressure.
If inflation subsequently eases and Treasury yields decline, the recovery potential for gold is expected to further expand. For investors who value portfolio diversification and long-term purchasing power protection, participation through staggered purchases or dollar-cost averaging based on their own risk tolerance is advisable, avoiding concentrated buying around the release of macroeconomic data. Due to the operating leverage characteristics of the gold mining sector, if gold prices resume their uptrend after a volatile pullback, its elasticity advantage will become more pronounced, and a long-term perspective can be adopted to capture the high-elasticity allocation opportunities in gold mining.
E Fund Gold Mining ETF (02824) covers 30 leading mining companies across four major producing regions—China, Canada, the U.S., and Australia. During gold price upcycles, its earnings elasticity is significantly higher than that of spot gold, making it an elastic tool for capturing excess returns in the gold sector.