In the long run, there is no need to be pessimistic about gold. Compared to the highly volatile silver, gold's performance is more stable, and its underlying logic has not changed. Currently, China's gold reserves are only one-fourth of those of the United States, and since the decoupling of the dollar from gold, the continuous issuance of global paper currencies has become the norm.
As long as fiat currencies continue to expand, gold's position as the ultimate store of value will continue to be highlighted.
The essence of national currencies is that they are credit tools convenient for circulation, relying on national strength and credit. Once a country falls into turmoil or recession, the value of paper money may sharply decline, while gold, due to its natural properties that transcend sovereignty, remains universally recognized as hard currency.
With the evolution of the international landscape and challenges to U.S. hegemony, the credibility of the dollar is beginning to weaken. In the process of promoting the internationalization of the renminbi and increasing trade settlements in local currencies, China also needs solid gold reserves to enhance currency credibility and stability.
Therefore, from a long-term trend perspective, central banks increasing gold reserves and strategic resource allocation will become the norm, and the support for gold will be significantly stronger than for silver. For investors, physical gold can be gradually accumulated during pullbacks and held for the long term; however, with futures gold, attention must be paid to leverage risks, and it is advisable to control positions and avoid chasing highs and selling lows. After a short-term sharp decline, the market may enter a phase of volatility, but a long-term bull pattern is still to be expected.
Silver: Emotion Clearance Under High Volatility
Historically, silver has had much greater elasticity than gold, possessing both monetary and industrial dual attributes. Recently, its rising slope has been steep, and the subsequent plunge is also within reason. Last week, a single-day drop of up to 30% set a historical record, likely forcing most high-leverage positions to exit, leading to a concentrated release of market panic.
It is expected that the external silver market will gradually stabilize and rebound, with subsequent structural changes being particularly critical. Due to price differences and circuit breaker mechanisms, the domestic market may continue to adjust in the short term, but volatility is already high, and a rebound in sync with the external market cannot be ruled out. After experiencing dramatic rises and falls, the silver market typically requires time to digest volatility, and it may enter a high-volatility oscillation phase for some time, making trend operations more challenging.
Investors are advised to remain on the sidelines and wait for clearer market structures before making moves.
Currently, there are three possible paths for the development of the situation:
Reaching an agreement at the last moment: The government avoids a shutdown, and the market may experience a rebound, with subsequent trends returning to being driven by technical factors.
A shutdown becomes a reality: Similar historical scenarios may reoccur, and the market could face widespread selling, putting pressure on mainstream cryptocurrencies such as Bitcoin and Ethereum.
Agreement passed but liquidity remains tight: The market maintains a sluggish consolidation, which has a relatively low probability of occurring.
For investors, the following actions are recommended:
Contract traders: Should avoid high leverage and loosen stop-loss settings to withstand the intense volatility that events may trigger.
Spot traders: If the market experiences a pullback due to a shutdown, it can be seen as an opportunity for phased positioning, focusing on mainstream assets in the oversold range. Potential buying levels for the following cryptocurrencies to consider:
SOL (Solana): If it falls below $120, it can be built up in steps. ETH (Ethereum): If it drops below $2,000, it is worth medium to long-term attention. XRP (Ripple): Has valuation attractiveness below the $1.2 range.
Although the risk of a government shutdown is a short-term variable, it may provide a rare opportunity for market misalignment. Stay calm and adhere strictly to discipline to seize the future amidst volatility. $SOL
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