Yet, if the shorts are really entangled in this, they may have some 'blinkered' views. According to Mohamed El-Erian, a well-known economist and Chief Economic Adviser at Allianz, the current surge in gold prices is clearly not so simple!

El-Erian indicated that the 'all-weather' rising characteristic of gold may herald something beyond economic, political, and high-frequency geopolitical developments. Western countries should pay more attention to this trend...

In a newly published column this week, El-Erian stated that over the past year, gold prices have experienced some strange changes. While setting one historical record after another, gold prices seem to have decoupled from their traditional historical influencing factors such as interest rates, inflation, and the US dollar. In addition, the continuous rise in gold prices contrasts sharply with the fluctuations in key geopolitical situations.

El-Erian pointed out that the constant rise in gold may indicate something that goes beyond economic, political, and high-frequency geopolitical developments. Western countries should pay more attention to this trend...

Looking at the trend of gold prices, in the past 12 months, the international gold price has risen from $1947 to the current $2715, an increase of nearly 40%.

Interestingly, this price increase is relatively linear, and any dip in gold prices will attract more buyers. Despite some drastic fluctuations in policy interest rate expectations, large fluctuations in benchmark US bond yields, persistent decline in inflation rates, and continued volatility in the forex market, gold prices have been steadily rising.

So, what is the truth behind the rise in gold prices? El-Erian first refuted several relatively one-sided claims.

Some may see the performance of gold as part of a broader rise in asset prices, for example, the USA S&P 500 index has increased by about 35% in the past 12 months. However, according to Erion, this correlation itself is unusual, as the price of gold is often negatively correlated with US stocks.

Others attribute it to the risks of geopolitical military conflicts, as military conflicts lead to many innocent civilians losing their lives and livelihoods, infrastructure being heavily damaged, and also trigger safe-haven demand in financial markets. But Erion says, looking at the price trends, there may be more reasons.

Erion points out that the continuous gold purchases by foreign central banks are an important driving force behind the strength of gold. Despite the existence of the American 'economic exceptionalism' narrative in the market, this buying seems to be not only related to many wanting to gradually diversify reserves and move away from the US dollar's dominance.

Non-US countries and businesses are intentionally seeking potential alternative solutions outside of the US dollar-based payment system, a system that has been the core of the international financial system architecture for about 80 years.

Why is this happening?

Erion states that if you were to ask why this situation is arising, you would typically get this kind of response: there is a widespread loss of confidence in the USA managing the global order, as well as specific developments.

You will hear that the USA is weaponizing trade tariffs and investment sanctions, while reducing interest in rule-based multilateral cooperation systems. 80 years ago, the USA played a key role in designing this same system.

You will also learn that although some of Russia's banks were removed from Swift, the system that handles the vast majority of cross-border payments, Russia still has the ability to continue trading and achieve economic growth. To this end, Russia has set up a slightly cumbersome trade and payment alternative system involving only a few countries. Despite its inefficiency and high costs, this allows Russia to bypass the US dollar and maintain a range of core international economic and financial relationships.

Another aspect is related to the conflict in the Middle East, many people believe that the United States is inconsistent in supporting basic human rights and applying international law. The United States, ignoring the widespread condemnation of the international community, unconditionally siding with its main ally Israel has further exacerbated this perception.

Arianne stated that this not only relates to the weakening of the US dollar's dominant position, but also to the gradual change in the operation of the global system.

He mentioned that currently there are no other currencies or payment systems that are able and willing to replace the core position of the US dollar in the system, and there are practical limitations to diversifying forex reserves. However, more and more smaller channels are emerging around this core; more and more countries are interested and increasingly participating.

Arianne pointed out that the changes in the price of gold are not only extraordinary in terms of traditional economic and financial impacts. It also goes beyond strictly geopolitical influences, and is related to a broader phenomenon of a long-term trend emerging.

He believes that with this trend deepening, it may lead to a serious split in the existing global system, eroding the international influence of the US dollar and the American financial system. This will affect the United States' ability in information dissemination and result-oriented strategies, and undermine its national security. This is a phenomenon that Western governments should pay more attention to.