Investing in stocks requires consulting Jin Qilin analyst reports for authoritative, professional, timely, and comprehensive insights to help you uncover potential thematic opportunities! This article features fund managers interpreting investment opportunities in the gold and silver markets. Recently, the international gold and silver markets have experienced an "epic狂欢" (狂欢). As of December 24th, the spot price of London gold broke through the $4,500 per ounce mark for the first time, reaching a high of $4,531; the spot silver price surged even more strongly to $75.5 per ounce. Their respective year-to-date gains have exceeded 70% and nearly 150%, significantly outperforming most global asset classes. Notably, the cumulative gain for London gold in 2025 has already achieved its best annual performance since 1990.
What are the main drivers behind this bull run in gold and silver? How are short-term factors and long-term logic resonating? After a full year of gains, what is the outlook for future upside? How can ordinary investors reasonably allocate precious metal assets? To address these questions, interviews were conducted with:
Wang Xiang, Manager of Bosera Gold ETF Guo Beibei, Manager of China Universal Gold and Precious Metals Fund Huang Zhi, Manager of CITIC-Prudential CSI 800 Nonferrous Metals Index Fund Liang Pussen, Manager of Qianhai开源 Gold ETF The interviewed fund managers believe the current precious metals rally results from a resonance between "short-term catalysts" and "long-term logic." The continuous climb in gold prices to record highs is primarily driven by the ongoing Fed interest rate cutting cycle and rising global risk aversion; silver's performance stems from market acceptance of its dual narrative combining "precious metal attributes" with "industrial attributes + strategic reserves." However, these managers generally agree that while this rally has fundamental support, market volatility may intensify after the rapid short-term surge, warranting caution against pullback risks. From a medium to long-term perspective, gold is still supported by factors like the weakening US dollar credit and central bank gold purchases, suggesting it may retain good allocation value. Silver's trend is strongly correlated with gold, and the gold-silver ratio still has room for correction, but silver's volatility could be greater.
Multiple favorable factors have combined to jointly drive the major bull market in gold and silver. What are the main drivers behind the recent continuous rise in gold prices to new historical highs? Guo Beibei: Main drivers include: First, the market consensus expects a shift in Fed policy from tight to loose, reducing the holding cost of non-yielding assets and enhancing the appeal of precious metals. Gold ETF holdings in the Americas and Europe saw significantly larger increases in physical gold during November-December compared to Asian market Gold ETFs. Second, central banks continue purchasing gold as an important reserve asset to diversify foreign exchange risk, bringing new demand for gold different from previous years. Huang Zhi: The Fed implemented its third rate cut of the year in December, heating up market expectations for further Fed cuts next year. A weakening US dollar index and rate cut expectations are key catalysts for the recent gold price increase. Simultaneously, increased geopolitical disturbances boosting safe-haven demand, and year-end allocation needs have also brought capital inflows. Liang Pussen: The core driving force behind gold's continuous climb to new records stems from resonance across two dimensions. On one hand, changes in US economic fundamentals are pushing the Fed toward a looser policy stance, significantly reducing the cost of holding gold. On the other hand, ongoing global geopolitical risks are strengthening gold's safe-haven attributes. The叠加 (overlapping) of these dual benefits has催生 (spawned) a global gold buying frenzy, pushing prices to repeated record highs. From a policy perspective, recent intensified downside risks in the US labor market became a key catalyst for the Fed's dovish turn. Against this backdrop, the Fed cut rates consecutively in September, October, and December, totaling 75 basis points. The current US federal funds rate still has considerable room to fall compared to the long-term neutral rate, leaving ample space for future easing. More notably, with an imminent Fed leadership change, a series of signals continually reinforce market consensus for Fed policy easing in 2026. The global liquidity easing cycle is highly likely to continue. Falling real interest rates directly reduce the opportunity cost of holding gold, greatly enhancing its allocation appeal. From a risk perspective, global geopolitical risks show no significant easing, continuously pushing up gold's safe-haven demand. The core of the current unprecedented global changes is the reshaping of the world order. During this process, uncertainty in global political格局 (landscape) and economic operation increases significantly, further strengthening gold's value proposition as the "ultimate safe-haven asset." Multiple favorable factors have combined forces, continuously stimulating increased global gold buying. World Gold Council data shows global physical gold ETF total holdings have climbed to a record high,直观印证 (directly confirming) the market's favor for gold assets.
Year-to-date, silver's gains have significantly outpaced gold's. What is the main logic behind this? Guo Beibei: Silver is a "shadow gold," more sensitive to interest rate expectations. Furthermore, besides benefiting from strong growth in industrial demand, particularly from solar, electronics, and the Indian market, supply shortages have further pushed prices higher. These factors jointly drove significant COMEX gold and silver price increases. Huang Zhi: In the recent rally, silver has shown stronger price elasticity than gold. On one hand, due to its relatively smaller market size and lower liquidity compared to gold, silver typically exhibits higher price elasticity. Gold prices led the rise in April this year, pushing the gold-silver ratio to a long-term historical high, leaving silver relatively undervalued. As market sentiment warmed, funds flowed into silver, pushing the ratio back towards its historical average. Silver prices accelerated, even exhibiting a "short squeeze" scenario. On the other hand, this year's silver rally is not just a "catch-up" as a gold shadow asset; the narrative combining silver's "precious metal attributes" with "industrial attributes + strategic reserves" has gained market acceptance. The recent US designation of silver as a "critical mineral" enhances its strategic value. Simultaneously, the accelerated global energy transition, with rapidly growing demand from new sectors like photovoltaics, new energy vehicles, and AI data centers, continues to expand silver demand. Meanwhile, silver, often a by-product of copper, lead, and zinc mining, has low supply elasticity. Tightening supply-demand fundamentals support silver prices.
Short-term catalysts and long-term logic are resonating, suggesting the upward trend may be sustainable. In this gold and silver bull market, how do short-term factors and long-term logic resonate? Which factors are more sustainable? Liang Pussen: The core logic behind this strong gold price surge lies in the deep resonance between short-term drivers and medium-to-long-term support logic. From a short-term perspective, the advancing Fed rate-cutting cycle combined with rising global risk aversion constitutes the core driver of the price increase. Viewing from a long-term lens, the current global environment is in a period of deep evolution within a century of transformation, with economic restructuring accelerating and geopolitical博弈 (game) intensity rising, laying a solid medium-to-long-term foundation for higher gold prices. Against this backdrop, the long-term logic supporting gold's strength can be归结为 (attributed to) two core dimensions: First, major global economies普遍 (widely) adopt a policy mix of "fiscal expansion + monetary easing" to counter economic downward pressure and solve development imbalance issues. Under this policy direction, market concerns about膨胀 (expanding) global debt and the stability of fiat currency systems continue to heat up. As a natural hard currency not reliant on any sovereign credit背书 (backing), gold's strategic value in global asset allocation becomes increasingly prominent. Second, alongside the loosening of the US dollar's long-term credit foundation,叠加 (coupled with) the strategic need for various central banks to promote foreign exchange reserve diversification, a sustained, large-scale global gold purchasing wave has emerged, building a solid "bottom support" for gold prices. These long-term support logics possess significant sustainability and are expected to help maintain a strong operational pattern for gold prices over the medium to long term. Guo Beibei: Short-term factors like geopolitical events (e.g., tariff turmoil), the continuation of the Fed's rate-cutting cycle, and a surge in short-term investment demand have driven rapid price increases. Long-term logic involves structural demand changes, such as central banks continuously increasing gold holdings to hedge against US dollar depreciation risk, global debt and deficit pressures, deglobalization trends, and growth in silver's industrial applications (e.g., new energy). The resonance manifests as short-term events amplifying long-term trends; for instance, rate cuts reduce opportunity costs, reinforcing safe-haven demand. Among these, long-term factors are more sustainable, as central bank purchases and industrial demand (e.g., structural silver shortages) are expected to last for years, while short-term factors like geopolitical risks can be more volatile. Huang Zhi: This precious metals rally results from resonance between "short-term catalysts" and "long-term logic." Short-term, factors like rate cut expectations, tense geopolitical situations, and year-end allocation fund inflows have driven recent price increases. Medium to long-term, the weakening of US dollar credit and the restructuring of the global monetary credit system form an important foundation supporting precious metal value. Gold, as a non-sovereign currency, is seeing its monetary属性 (attribute) repriced, becoming an important tool for hedging currency credit risk. Simultaneously, many central banks seek foreign exchange reserve diversification, and gold's status in central bank asset allocation is rising. China's central bank has increased gold holdings for 13 consecutive months. Central bank gold buying provides support for gold prices, a trend likely to be sustainable.
The focus of gold's pricing logic has shifted, with monetary and safe-haven attributes temporarily exceeding financial attributes. Recently, gold price performance has decoupled from real interest rates. Does this indicate a structural change in gold's pricing logic, and what are the underlying deep-seated reasons? Huang Zhi: Gold prices are influenced by multiple factors including its monetary, financial, safe-haven, and commodity attributes. Typically, gold can be viewed as a "zero-coupon bond," and US Treasury real interest rates一定程度上 (to some extent) represent the opportunity cost of holding gold, usually showing a negative correlation with gold prices. However, in recent years during gold's ascent, prices have sometimes deviated from traditional pricing indicators like the US dollar index and US Treasury real interest rates. This indicates a shift in the market's focus regarding gold's pricing logic. Against the backdrop of "de-dollarization," the global monetary system faces challenges, enhancing the importance of gold's monetary attribute. Gold, as a non-sovereign currency, has a substitution relationship with sovereign currencies like the US dollar within the monetary system. It serves as a long-term value anchor when the global monetary credit system experiences波动 (fluctuations). When market concerns about the sovereign currency credit system arise, the importance of gold as a tool for hedging currency credit risk increases. That is, the influence of monetary and safe-haven attributes temporarily exceeds that of the financial attribute. The sustained gold purchasing behavior by central banks also impacts gold's price formation mechanism, providing continuous support and reducing gold price sensitivity to traditional factors like real interest rates. Liang Pussen: In fact, since 2022, the traditional linkage between gold prices and real interest rates has significantly decoupled, and gold's pricing logic has undergone structural reshaping accordingly. The deep-rooted cause of this change lies precisely within the broader context of global order restructuring, where significantly heightened uncertainty in geopolitical博弈 (games) and economic格局 (landscapes) has fundamentally altered gold's supply-demand and pricing framework. On the supply side, gold mining involves long cycles and low capacity expansion elasticity, naturally possessing supply rigidity. On the demand side, sustained large-scale gold purchases by global central banks to promote reserve diversification,叠加 (combined with) increasing market recognition of gold's core attributes as an inflation hedge and safe haven, and its strategic value in asset allocation, have催生 (spawned) large-scale incremental demand. A significant supply-demand imbalance, where incremental demand far exceeds incremental supply, has become the core动力 (driver) behind gold's持续 (sustained) strength.
The overall outlook for precious metals is optimistic, but short-term volatility may intensify. Looking ahead, what is your judgment on the price prospects for gold and silver? Is there signs of overheating in the current market? Wang Xiang: Last week's released Michigan Consumer Sentiment Index and existing home sales data both fell short of expectations. Meanwhile, the Bank of Japan raised rates by 25bp to 0.75%. Although policy rates remain significantly below inflation, short-term liquidity withdrawal pressure has been released. The宽松 (easy) atmosphere is favorable for an overall optimistic precious metals market. Regarding the future Fed Chair candidate, Kevin Warsh performed relatively well in recent exchanges with Trump, leading to increased market bets on his probability of winning. Although both Warsh and Hassett would likely comply with Trump's demands for rate cuts, Warsh's cautious stance towards QE (Quantitative Easing) might differently impact the trend strength and volatility path of precious metals, without changing the overall optimistic outlook. Huang Zhi: This precious metals rally has fundamental support, but after the rapid short-term surge, market volatility may intensify. Short-term, market trading sentiment is quite亢奋 (exuberant), with prices showing钝化 (blunted) reactions to short-term negative news, requiring vigilance against pullback risks. Medium to long-term, gold remains supported by logic like weakening US dollar credit and central bank purchases. Short-term, it is influenced by changes in geopolitical situations and the Fed's monetary policy path. Currently, gold may still hold good allocation value. Silver's trend is strongly correlated with gold, and the gold-silver ratio still has some correction room, but silver's volatility could be greater. Silver's dual "monetary + industrial" attributes mean whether industrial demand can持续兑现 (continuously realize) expectations will affect its upside potential.
Returning to the essence of asset allocation: Consider dollar-cost averaging or buying on dips in batches to avoid chasing highs. What are the potential risk points for future precious metal investments, and which key signals need close attention? How can ordinary investors participate in the precious metals market? Liang Pussen: We highly recognize gold's core allocation value for medium-to-long-term inflation hedging, avoiding geopolitical波动 (volatility), and optimizing asset portfolios. However, excessive short-term market euphoria has partially透支 (discounted) future upside potential, even breeding a series of irrational trading behaviors. Taking the recent market as an example, some listed precious metals LOF funds showed substantial premiums, with many investors irrationally chasing highs in the secondary market, paying畸高 (abnormally high) premium costs. Considering the current market environment and new gold VAT regulations, we believe gold ETFs and their feeder funds are an efficient allocation tool for ordinary investors. Given that current gold prices already partially reflect the core narratives of the rate-cutting cycle and "de-dollarization,"叠加 (coupled with) increased profit-taking pressure after the sharp short-term rise, the probability of continued substantial surges has significantly decreased. Investors need to abandon short-term gaming mentality, anchor reasonable return expectations, and return to the essence of gold as an asset allocation tool for hedging inflation and systemic risks, and smoothing portfolio volatility over the medium to long term. Simultaneously, considering gold is a non-yielding asset, investors are advised to control its portfolio weight. From an asset allocation perspective, a 10%-20% allocation ratio can effectively optimize a portfolio. For investors currently with low gold allocations, consider分批布局 (deploying in batches) via dollar-cost averaging to reduce entry costs and timing risks. Wang Xiang: If subsequent US economic data proves unexpectedly strong, affecting the rate cut implementation path and accompanied by a US dollar index rebound, gold could face阶段性 (periodic) pressure. Also, after the annual gains, the volatility of gold assets may increase, and investors should prepare for risk prevention. Consider using 10% as the central allocation ratio for gold ETFs. Quantitative research shows that adding gold to a stock-bond portfolio, at around 12%, optimizes the portfolio's risk-reward ratio (Sharpe ratio); at 8%, maximum drawdown control might be better. Investors can consider adjusting around the 10% central point based on market sentiment:适度超额配置 (moderately over-allocate) when short-term trading logic is clear and sentiment is high;阶段性减配 (periodically under-allocate) during market downturns or adjustment periods. Huang Zhi: This precious metals rally is the result of catalysis by both long-term logic and short-term factors. Long-term logic influences the trend, while short-term factors may cause price波动 (volatility). Precious metal investing requires attention to changes in geopolitical situations, shifts in Fed rate cut expectations, and the pace of central bank gold purchases. Among these, Fed monetary policy expectations may fluctuate with changes in economic data, and geopolitical event impacts will波动 (fluctuate) as situations evolve. For investors, precious metals can become an important part of asset allocation or serve as a "ballast stone" for the investment portfolio. Consider adopting dollar-cost averaging or buying on dips in batches to avoid chasing highs.
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