Economic Daily: Gold Has Become a Risk Asset

Odaily Planet Daily News As international gold prices fluctuate violently near historical highs, gold has transformed from a traditional safe-haven asset into one of the most volatile risk assets globally. Meanwhile, international institutions have shown significant divergence in their expectations for gold price trends. Why is gold no longer a safe haven?

There are three root causes. First, trading is extremely crowded. Second, the transmission path of liquidity shocks has changed. When assets broadly decline, investors face margin call pressure. Due to its high liquidity, gold paradoxically becomes a preferred asset to sell off for cash, triggering a negative feedback loop of "decline – sell-off – further decline" through massive stop-loss orders and quantitative selling. Third, the pricing logic has undergone a fundamental shift. The correlation between gold and interest rates has returned to elevated levels.

In short, gold is no longer a hedging tool; it has become risk itself. The supporting factors for the sustained rise in gold prices are gradually loosening, while pressures are quietly converging. Given that international gold prices had previously risen too significantly, the possibility of overshooting on the downside cannot be ruled out in the future. Over the medium to long term, gold prices will inevitably fall below $4,000 per ounce to stabilize at a reasonable level. Changes in international gold prices will inevitably impact domestic gold prices, making it necessary to enhance risk awareness. (Jin Shi)