Let's discuss the overall logic of this gold bull market.

Before the Bretton Woods system, global currencies were pegged to the US dollar, which was backed by gold, and other countries pegged their currencies to the dollar. After this system ended, gold prices rose from $35 to $800. Meanwhile, the US dollar shifted from being gold-backed to being backed by US Treasuries. Theoretically, as long as the US does not default on its debt, the dollar's credit remains intact. The current problem lies with US Treasuries, with nearly $40 trillion in debt, which at a 5% interest rate requires an annual payment of $2 trillion—an unsustainable amount for the US government. The US government's healthy debt servicing capacity is below $1 trillion, meaning interest rates would need to be lowered to below 2.5%, and the US must also control the expansion of its debt. Additionally, Trump's policy of a weak dollar contributed to this situation. During the Bush Jr. era, the dollar index fell to around 80, and Trump's weak dollar policy further pushed the dollar toward its target levels.
The cycle of rate cuts and a weak dollar will boost commodity prices in a bull market, which is a predictable pattern when dollar credit is high.
Thirdly, the issue of dollar credit. The weakening of dollar credit is not about US hegemony; in fact, hegemonic status actually supports the strengthening of dollar credit. Currently, countries are losing confidence in the US government's ability to control the expansion of its debt, doubting that the US can prevent excessive debt growth. As this out-of-control situation persists, US debt default becomes a matter of when, not if.
The current global currency system forms a chain: the Fed holds gold and US Treasuries, US Treasuries back the dollar, and the dollar backs other fiat currencies. As long as US Treasuries are stable, this chain remains intact. Once US Treasuries face problems, central banks around the world will naturally shift their reserves from dollars to other currencies, with gold's inherent monetary properties making it the best reserve asset.
Therefore, originally, gold only needed to be a reserve for the dollar, but now it must also serve as a reserve for other countries, leading to a significant increase in demand for gold. However, the supply of gold cannot meet this increased demand.
Currently, the price ratio of gold to credit currency is driven by two major factors: 1. Excessive issuance of credit money, and 2. Demand from central banks of various countries.
As long as the US debt issue remains unresolved, the logic of the gold bull market will not change. #贵金属行情下跌