This report centers on the "fundamental paradigm shift in gold pricing," systematically arguing the deep logic behind the historic decoupling of the gold and US dollar pricing systems since 2022. Based on this, it proposes a new investment framework for A-shares adapted to the new geopolitical order.
Core Views The core thesis of this report is to reveal the fundamental paradigm shift in the global monetary order since 2022, marked by the historic decoupling of gold from the US dollar pricing system. This change is not a short-term market fluctuation but is rooted in a structural fission of the credit foundation of the US dollar as the world's dominant fiat currency, signaling the end of the old order and the gestation of a new one.
The deep causes of the US dollar's credit crisis can be systematically explained by the "Three-Pillar Theory of Sovereign Currency Credit." This theory posits that the value of a sovereign currency is supported by three pillars: economic productivity, military and geopolitical power, and institutional credit with the rule of law. The current US dollar system faces severe challenges in all three aspects. Economically, the hollowing out of manufacturing weakens its tangible anchor. Militarily, the relative weakening of its global influence erodes its security premium. Institutionally, disorderly debt expansion and the weaponization of financial tools have fundamentally shaken its credit as a "neutral public good." Specifically, the institutional credit pillar suffered a systemic collapse in 2022 when the US and its Western allies froze Russia's foreign exchange reserves, breaking the fundamental international financial contract of "inviolable sovereign asset safety." The economic productivity pillar has relatively declined due to US deindustrialization and China's rise, making the dollar's value increasingly reliant on the virtual economy cycle. The military power pillar has shown fatigue in multiple conflicts, weakening its ultimate guarantee capability for currency credit. The loosening of these three pillars reinforces each other, forming a negative spiral of continuous intrinsic devaluation of the US dollar.
Against this backdrop, gold is making a strong comeback as a supra-sovereign "shadow anchor" and ultimate measure of value. Record gold purchases by global central banks indicate that gold is being re-endowed with strategic attributes of being "non-sovereign and sanction-resistant." The market is beginning to revalue other assets using gold as the benchmark. The historically extreme lows of the "oil-to-gold ratio" and "copper-to-gold ratio" suggest that once supply-demand dynamics improve or the US dollar depreciates further, US dollar-denominated commodity prices could experience strong appreciation.
For the A-share market, this macro shift implies a fundamental iteration of the investment paradigm. The traditional framework based on "growth-profit-valuation," with its underlying assumptions of perpetual operation and market efficiency, is being eroded by geopolitical risks and institutional changes. Future analysis must place sovereign credit stability, supply chain security, and technological autonomy and controllability at the core, building a new thinking framework based on "security-resilience-controllability."
This report proposes three core investment themes based on this analysis. The first is resources and hard asset currencies, including traditional precious metals like gold to hedge currency risk, and key strategic minerals serving the AI and new energy revolutions, which are strategic lifelines in great power competition. The second is core technology assets, such as AI and semiconductors, commercial aerospace, and controlled nuclear fusion, which are the engines driving the productivity revolution and determining competitive outcomes. The third is security assets, whose demand stems from a "national subscription model," covering areas like national defense, cybersecurity, and critical infrastructure, providing certainty through cycles.
In conclusion, this report argues that we are at a historical inflection point where the old order is disintegrating and a new one is being constructed. The dusk of the US dollar signals a restructuring of global power and credit landscapes, while the return of gold reflects a more complex and real world. Investors must understand this paradigm shift, grasp the pulse of the new era where security outweighs growth and resilience precedes efficiency, and make strategic allocations along the three main themes of resources, technology, and security to navigate future volatility and opportunities.
Risk Warning: Economic data and policies may fall short of expectations; overseas policies may tighten beyond expectations.
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