The gently sloping line of the gold price curve might be the market holding its breath.
Early yesterday morning, I was watching the gold price chart and noticed a subtle change; it seemed that the gold price had entered a kind of 'calm period.' Since the 16th, the domestic gold price has been hovering in the range of 965-975 yuan, as calm as a lake.
But last night it suddenly jumped to 980 yuan, and trading late at night was inconvenient, leaving many investors just staring in disbelief. This morning, when I opened my eyes, it had fallen back to around 975 yuan. This kind of trend appears stable on the surface, but in reality, there are undercurrents.
As a long-term observer tracking asset trends, I sensed something unusual.
01 The 'Calm' Illusion of Gold
The recent performance of the gold market can be described as a 'suspense drama' in the financial market. Data shows that on December 16, international spot gold once dropped below $4300/ounce, but quickly reversed and surged that night, reaching a high of $4342.21/ounce the next day.
Such extreme fluctuations in a short period cannot be simply described as 'stable.'
Looking back at history, gold has experienced multiple 'roller coaster' markets in 2025. In April, gold prices quickly corrected after breaking through the historical high of $3500/ounce; in May, gold prices rebounded sharply from $3120/ounce to above $3310/ounce.
Under the seemingly calm market, there are actually multiple forces at play. On one hand, expectations for interest rate cuts by the Federal Reserve are rising; on the other hand, the global central bank gold buying spree continues. These factors together form the fundamental support for gold prices, but they also accumulate a large amount of profit-taking positions.
02 Dollar and Gold: A Complicated 'Relationship'
Traditionally, it is believed that the dollar and gold exhibit a 'seesaw' effect; when the dollar is weak, gold is strong, and when the dollar is strong, gold is weak. However, reality is much more complex than that.
Recently, the dollar has shown weak performance, which indeed provides space for gold to rise. But what is more noteworthy is that the negative correlation between the dollar and gold is weakening.
Historically, such divergences are not uncommon. From May to December 1993, during the same period in 2005, and from late 2008 to early 2009, gold and the dollar have risen simultaneously multiple times. This indicates that under certain circumstances, both can serve as safe-haven choices.
The current market is in a special period. The scale of U.S. debt has reached $37 trillion, and the fiscal deficit rate remains high, shaking the foundations of dollar credit. At the same time, global geopolitical risks are rising, and investors are seeking safe assets, highlighting gold's safe-haven attributes.
03 Geopolitics: The Invisible Driver of Gold
The Russia-Ukraine conflict has turned into a long-term war of attrition, and the Middle East remains tense due to the Iranian nuclear issue and energy disputes. These geopolitical risks are key factors driving up gold prices.
Historical data indicates that during the Ukraine crisis, gold prices rose by 15%, while the monthly increase caused by this round of tariff wars reached 8%, far exceeding the past.
The impact of geopolitical risks lies in their unpredictability. When conflicts occur at the Thailand-Cambodia border, gold instantly becomes a safe haven for capital. However, once the situation calms down, and the major geopolitical risk factors that stimulated gold's rise over the past three years are eliminated, gold prices may drop two-thirds of the gains made since the crisis.
04 Ordinary People's Gold Investment Strategy
Faced with fluctuations in gold prices, many ordinary investors have a rather contradictory mindset. One netizen bluntly stated: 'Gold prices have nothing to do with me; when prices rise, I have no gold to sell, and when they fall, I'm not in a hurry, as I have no gold.'
However, this viewpoint may overlook the true value of gold in asset allocation.
For ordinary investors, I believe that dollar-cost averaging in gold is the best strategy. Zhang Wenbin, head of the China market research at the World Platinum Investment Association, points out that dollar-cost averaging in gold can smooth costs, diversify risks, and avoid 'chasing highs and selling lows,' making it a truly suitable 'lazy investment' method for the general public.
In terms of specific allocation, referring to the recommendations of the World Gold Council, gold should account for 5%-10% of household assets. Investors with a higher risk appetite can appropriately increase it to 15%, but should not be overly exposed to fluctuations in gold prices.
When choosing investment tools, low-risk preference investors can allocate bank accumulated gold and physical gold; medium-risk investors can invest in gold ETFs; high-risk investors can participate in high-leverage products like gold options and futures.
The future of the gold market will largely depend on the direction of the Federal Reserve's interest rate policy, changes in geopolitical risk, and the state of the dollar's credit. Currently, analysts from several Wall Street investment banks, including Bank of America, Société Générale, and HSBC, have set next year's gold price target at a high of $5000 per ounce.
But don't forget, when gold prices plunge from a high, many will choose to take profits. Data from the Shanghai Gold Exchange shows that after a price drop, customer selling volume increased by 40% compared to the previous trading day.
The gold market is always full of opportunities, only lacking patience. In this era where uncertainty has become the new normal, gold investment should not be a short-term gamble but a long-term strategic allocation.
Dear friends, have you recently made any gold investment operations? Feel free to share your views and strategies in the comments and follow up @崎哥说币 #加密市场观察 $BTC
