Economic Daily: Gold Has Become a Risky Asset

Odaily Planet Daily News As international gold prices fluctuate sharply near historic highs, gold has transformed from a traditional safe-haven asset into one of the most volatile risk assets in the world. At the same time, 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 fall broadly, investors face margin call pressures, and because gold is highly liquid, it becomes the preferred asset to sell off for cash, triggering a negative feedback loop of "decline—sell-off—further decline" driven by 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 a high level.

In short, gold is no longer a safe-haven tool, but risk itself. The supportive factors for sustained high gold prices are continuously loosening, while suppressing forces are quietly converging. Since international gold prices have clearly risen too much, the possibility of a significant overshoot on the downside cannot be ruled out. Over the medium to long term, gold prices will inevitably fall below $4,000 per ounce and can only stabilize at a reasonable level. Changes in international gold prices will inevitably affect domestic gold prices, making it essential to enhance risk awareness. (Jinshi Data)