When Trump's tariffs sliced through the financial markets like a lightning bolt, global investors, like startled birds, scrambled to find shelter. Once again, gold, the ancient fortress, withstood five millennia of storms, demonstrated its unparalleled protective allure. In the past week, gold prices surged ike a runaway stallion, posting the largest weekly increase since the pandemic storm. Behind this golden feast lies a shift in investors' faith in U.S. assets once regarded as a haven. U.S. bonds were sold off, the stock market collapsed like a row of dominoes, and the dollar's exchange rate plummeted to a three-year low. In this reshuffling of the financial landscape, gold attracted a flood of risk-averse capital from all corners of the world.
Global supply chains are like fragile castles built with dominoes, where the slightest tremor can trigger a chain reaction. The spectre of economic recession lingers like the organ music echoing over Wall Street-always present, never fully gone. Amidst this chaos, interest rates and the dollar, the "financial twins," are dancing a strange tango.
Rising rates, like a tightening noose, suffocate risk assets; meanwhile, a weakening dollar, like a deflated life raft, unexpectedly gives gold's ship additional buoyancy.
This seemingly paradoxical combination, like the fusion of ice and fire, has created the ideal breeding ground for the gold market. Central banks have transformed into shrewd jewellers, no longer satisfied with just the dollar as their material, quietly weaving gold and silver threads into their foreign exchange reserves. In particular, with its increasing gold purchases, China’s central bank is playing a grand chess game, every move sending shockwaves through the international gold market. The gold frenzy in the East is even more breathtaking. The Chinese demand for gold is like a desert traveller spotting an oasis, with domestic gold prices continuing to widen the premium over international markets, forming a unique "golden Great Wall." Trading volumes on the Shanghai Gold Exchange have hit new highs, and the atmosphere in the trading hall is akin to the pre-Spring Festival rush. This booming demand reflects not only the traditional love for gold among the public but also the wisdom of hedging against the volatility of the renminbi.
Optimistic forecasts from professional institutions have added fuel to this gold feast. UBS analysts have raised their gold price expectations three times in a row, much like continuously raising the height of a concert hall's dome, further expanding the potential for gold's appreciation. Investment banks such as Goldman Sachs and Citi have also joined the forecasting game, with their research reports acting as a conductor's score, guiding the flow of global capital. The influx of funds into gold ETFS has reached a new high since the pandemic, with each purchase adding fuel to the fire. Amidst this frenzy, gold, the timeless precious metal, is writing a new legend in the digital age.
In this financial chaos, the return of gold as a king teaches us a vivid lesson: true value never fades with time. While algorithmic trading and cryptocurrencies capture the attention of most, it is this silent metal that, in times of crisis, proves who the most loyal guardian of wealth truly is. The influx of funds into gold ETFS has reached its highest level since the pandemic, like countless small streams flowing into a great river, driving gold prices to break new records. This golden feast may have only just begun. History tells us that when investors start to doubt the value of paper currency, when central banks lose absolute control over interest rates, and when cracks appear in the international order, gold will always make its loudest statement in its quiet way. In this era of uncertainty, holding gold is no longer a conservative choice but a necessary safeguard against future risks. As the ancient saying goes: "In prosperous times, collect antiques; in chaotic times, buy gold." As Trump's tariffs still fly, and the global trade system faces reconstruction, the gates of gold's thousand-year-old fortress are wide open to all investors seeking shelter.
