This week, in the time zone of UTC+8, the spot gold price has been indicated by some market data sources to break through historical highs, oscillating in the range of $4700–$4750 per ounce. Although this single source of data still requires cross-verification from multiple parties, it is sufficient to outline a clear scenario: against the backdrop of macroeconomic and geopolitical uncertainties, risk aversion sentiment has significantly intensified, and gold has once again taken center stage in the narrative. Concurrently, Bridgewater Associates founder Ray Dalio has once again issued warnings about "capital wars" and "long cycles," with his pessimistic assessments quickly becoming a focal point of public discourse, ranging from trade tensions to fiscal deficits, and political and geopolitical order. As gold prices hover at high levels and capital rapidly shifts between assets, an unavoidable question has emerged: Is this round of gold price surges merely an amplification of short-term panic, or is it an external manifestation of a forced reassessment of global monetary and capital order?
Gold Price Oscillation at High Levels and Resurgence of Risk Aversion
The image of spot gold oscillating around the $4700–$4750 per ounce range highlights a typical high-level turnover: bulls attempt to push new highs, while bears bet on accelerated corrections. The current price in this range primarily comes from single source data, which has not yet formed a unified authoritative standard, thus it is more suitable to be viewed as a market outline rather than an exact anchor point. However, if we slightly extend the timeline, we will find that after breaking past previous highs, gold prices can still repeatedly engage in relative narrow high-range trading, indicating the resilience of risk-averse buying rather than a one-time emotional peak.
From a macro perspective, global markets are currently facing multiple overlapping uncertainties: major economies are repeatedly downgrading growth prospects, fiscal deficits remain high, interest rate path expectations are fluctuating, and the hidden costs of geopolitical conflicts and supply chain restructuring continue to rise. Under the influence of these variables, some investors' trust in traditional "risk-free rates" and sovereign credit has been eroded, prompting them to actively seek anchors for their portfolios that do not rely on a single fiat currency's credit. Gold, as an asset with no counterparty risk and no default risk, naturally possesses appeal during the escalation of crisis narratives.
When comparing the phase performance of traditional risk assets, this shift in asset preference becomes even clearer. On one hand, the stock market is experiencing increased volatility under the dual pressure of interest rates and profit outlooks, while the bond market, caught between high debt and persistent inflation, struggles to provide the same sense of "value preservation and risk aversion" as before. On the other hand, cross-market capital flows indicate that allocation funds are withdrawing from certain growth stocks and high-leverage assets, instead increasing holdings in gold and other defensive varieties. The stabilization of gold prices at high levels essentially reflects that the pricing power of gold as a safe-haven asset is returning, rather than merely a short-term trader's frenzy.
Dalio's Long Cycle and the Shadow of Capital Wars
Dalio's assessment of the current situation continues the "long cycle" framework he has built over many years. Within this framework, trade tensions and fiscal deficits are not isolated events but are inevitable products of changes in the relative strength of major powers and the latter stages of the debt cycle. He has repeatedly emphasized that trade frictions, tariff barriers, and industrial chain restructuring will gradually weaken the dividends of globalization, increase the costs of economic operation, and more critically, shake the market's long-term confidence in U.S. assets and the dollar system. When U.S. fiscal deficits hover at high levels and debt continues to rise, yet cannot be naturally digested through high growth or moderate inflation, investors will begin to question: Is holding long-term local currency bonds still considered "risk-free"?
On this basis, Dalio's assertion that "political and geopolitical order tensions are nearing the brink of war" has been widely quoted and amplified. The credibility of this statement needs to be carefully unpacked: from multiple sources of information, he emphasizes the rising probability of structural confrontation and conflict, rather than simply asserting that a specific war is imminent. In other words, he is more concerned with the redefinition of an entire order—from technology and financial sanctions to the fragmentation of capital flows and settlement systems—these processes alone are sufficient to shake the foundations of asset pricing without necessarily evolving into full-scale military conflict. Therefore, viewing it as a reminder of "risk premium repricing" is far more fitting than treating it as a "doomsday prophecy."
If we place the current record high gold prices back into this long cycle narrative, we find that the logical chain is not complex. The frequent use of trade tensions and sanctions tools has led some countries and institutions to begin reassessing their dependence on a single currency and a single financial system; high debt and high deficits have weakened the persuasiveness of sovereign credit as the ultimate guarantee. The result is that under the expectation of a "capital war," gold is no longer merely a simple hedge against inflation, but rather a systemic hedging tool against financial sanctions, asset freezes, and the weaponization of payment systems. The oscillation of gold prices at high levels resembles the market's discounting of this long-term risk, rather than an emotional response to a specific piece of news or a particular meeting.
Erosion of Trust in Fiat Currency and Reassessment of Gold's Order
Dalio has long emphasized that during turbulence in the fiat currency system or when credit expansion enters its later stages, portfolios should moderately increase their holdings in gold to hedge against currency devaluation and systemic turmoil. This idea does not stem from a "faith" in gold, but rather from an induction of historical debt cycles and the laws of currency devaluation. After multiple rounds of credit expansion, when the supply of money and nominal debt continues to expand while real output and productivity cannot keep pace, the system often seeks a balance point in the cycle of "inflation-devaluation-revaluation." In this process, gold plays the role of a value anchor that does not rely on any single sovereign backing.
In an environment of high debt and high fiscal deficits, the transmission chain of questioning fiat currency purchasing power and credit can roughly be broken down into several links: first, persistent fiscal deficits mean that the government needs to continuously issue new debt or expand its balance sheet to fill the gap; second, under conditions of weak growth and limited tax space, the actual solution often points to nominal devaluation—through inflation or currency weakening to dilute the burden of existing debt; finally, when the market begins to anticipate that this "implicit default" mechanism will become the norm, long-term interest rates, currency exchange rates, and inflation expectations will fluctuate repeatedly, leading investors to naturally doubt the long-term purchasing power of fiat currency. This doubt will not erupt overnight, but will be rapidly amplified at crisis points.
Once gold quietly returns from "marginal allocation" to the core allocation level of investment portfolios, the pricing system of major asset classes will also undergo potential rearrangement. For institutions, an increase in gold's weight means a relative reduction in certain sovereign bonds and credit bonds, which in turn affects the interest rate curve and risk premium structure; for multinational capital, the increased demand for using gold and other physical assets as collateral or settlement bases may accelerate the formation of a "multi-anchor" pattern, weakening the monopoly position of a single reserve currency. This brings about a more fragmented yet more hedging-oriented global asset landscape, with the new high in gold prices merely being an intuitive annotation of this landscape's redrawing.
The Hedging and Liquidity Game Between Crypto and Gold
As gold is being reassessed within the asset pricing system, the dynamics of funds in the crypto world are also subtly resonating. According to single source data, Tether has minted approximately 2 billion USDT on the Tron network; although this number also requires verification from more channels, it at least indicates a significant expansion in the supply of on-chain dollar alternatives. For investors accustomed to observing on-chain fund flows, the issuance of USDT is often seen as a prelude to potential incremental capital entering the market, but this time, it coincides with the rising global risk aversion sentiment, prompting the market to reconsider: is this a leverage increase for high-risk speculation, or a reallocation of "offshore dollar liquidity"?
Logically, the expansion of USDT supply may be associated with two funding paths. One is the traditional "crypto bull market path"—more funds enter exchanges and on-chain protocols through fiat-stablecoin channels, chasing high-volatility assets and derivative yields; the other leans more towards the "hedging and liquidity path"—some funds view USDT as a tool for cross-border transfers, rapid settlements, and temporary hedging, choosing to hold both gold and on-chain dollar alternatives simultaneously to hedge against risks from different dimensions amid heightened macro and geopolitical uncertainties. Current available data is insufficient to precisely dissect the weight of these two paths, but the coexistence of these two demands has already altered the traditional landscape of safe-haven assets.
When comparing gold and crypto assets within the same framework, clear differences and complementarities can be observed. On one hand, gold's advantage lies in its credit accumulated over hundreds of years and broad recognition at the sovereign level, with its safe-haven properties leaning more towards being the "last guarantee" in extreme situations; however, its physical form and settlement efficiency limit its use in high-frequency trading and small cross-border flows. On the other hand, crypto assets, especially on-chain dollar alternatives like USDT, have significant advantages in liquidity, programmability, and cross-border transfer speed, but face regulatory uncertainties, technological risks, and dependence on the credit of the issuing entity. The combination of the two has led some institutions and high-net-worth funds to adopt a "gold + on-chain dollar" dual hedging structure: gold hedges against sovereign and currency system-level tail risks, while USDT hedges against operational risks from capital controls and payment restrictions.
Who is Buying Gold and the Reshaping of Security Boundaries
From publicly available information and long-term trends, central banks and large institutions have been continuously increasing their gold holdings, which has been a clear mainline over the past few years. Although there are still data gaps regarding the specific timing and scale of increases for individual countries or institutions, which should not be overly amplified, the overall direction is not ambiguous: during a phase of frequent reshaping of global trade patterns, settlement systems, and sanction tools, sovereign and large allocation institutions are more inclined to use gold to establish a "hard safety cushion" for local currency credit and external assets. This safety cushion is not predicated on the promises of a single country or institution, but rather resembles a value base that can be accepted across systems and camps.
At the national level, increasing gold reserves to hedge against currency and sanction risks is driven by multiple motives and the interplay of real constraints. One motive is to reduce dependence on a single reserve currency in the process of diversifying foreign exchange reserves, avoiding the freezing of foreign reserves or restrictions on payment channels in extreme situations; another motive is to use gold as a credit enhancement tool in the exploration of local currency internationalization and regional financial integration, thereby increasing the acceptance of local currency settlements in regional trade. However, at the same time, adjustments to reserve structures are constrained by foreign exchange balance conditions, domestic financial stability goals, and international political relations, making it impossible to achieve overnight; rather, it is a gradual process of weighing risks and opportunities.
From the perspective of institutions and sovereign funds, reshaping security boundaries through gold amid intensified geopolitical competition can be understood as an attempt at "de-weaponization at the asset level." As financial sanctions, the exclusivity of settlement systems, and restrictions on capital projects are increasingly used as political tools, fund managers must consider: which assets can still be regarded as "truly owned" in extreme situations? Gold, due to its non-digital, non-debt nature and cross-system acceptability, is naturally pushed to the forefront. Thus, a new security stratification has formed at the asset allocation level: the outer layer consists of high-yield, high-volatility assets, the middle layer is constrained by various rules and contractual arrangements of financial assets, and the innermost layer consists of physical assets and "neutral assets" that cannot be easily stripped away by a single system, with gold clearly falling into this inner layer. This redefinition of security boundaries is a deeper backdrop to the current rise in gold prices and risk aversion demand.
From Panic to Reconstruction: The Dual Role of Gold and Crypto
Looking back at the recent record high in gold prices, its driving forces can be roughly divided into two categories: one is short-term risk aversion sentiment, driven by escalating geopolitical tensions, fluctuations in economic data, and market uncertainties regarding policy paths, reflected in the reduction of funds in high-volatility assets and the phase-based rush towards traditional safe-haven assets like gold; the other is long-cycle concerns, stemming from long-term anxieties about high debt, high deficits, and the narrative of capital wars, reflected in the slow variable adjustments of sovereign and institutional allocations to gold. The oscillation of gold prices at high levels is the result of the superposition of these two forces: the former determines the rhythm of volatility, while the latter raises the height of the oscillation platform.
Looking ahead, under the grand narrative of "capital wars," gold and crypto assets are likely to jointly participate in a round of global asset repricing. Gold will continue to play the role of hedging against sovereign credit and the tail risks of fiat currency systems, with its allocation logic becoming more deeply embedded in the strategic asset allocation frameworks of central banks and long-term funds; crypto assets will function around "disintermediation, cross-border transactions, and high liquidity," providing a toolbox for the migration of funds between different jurisdictions and regulatory systems. The two should not be simply viewed as substitutes, but rather are more likely to collaborate in a division of labor, jointly promoting a gradual shift from a single currency anchor to a multi-value anchor.
In this era of re-evaluated uncertainties, it is crucial to be wary of the misleading nature of single prices and unverified data. Whether it is the gold price range of $4700–$4750 per ounce from a single source or the issuance scale of USDT under on-chain statistical standards, these can only serve as one facet of observing trends and should not be the sole basis for making significant asset decisions. In an environment where information noise far exceeds previous levels, what is truly worth adhering to may not be an absolute faith in a particular asset, but rather a cautious attitude towards data sources, sensitivity to systemic risks, and a risk management awareness that builds redundancy and buffers between different assets and systems.
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