Since the beginning of this year, amidst various "uncertainties" such as geopolitical tensions, the Federal Reserve's interest rate cuts, and concerns about the U.S. economic outlook, gold prices have broken the 2000 dollars per ounce mark, continuously setting historical records and reaching a peak of 2790 dollars within the year, seemingly rushing towards 3000 dollars without looking back.

On November 5, a huge uncertain event—the U.S. election "shoe dropping"—caused gold to drop 6.51% within a week (from November 6 to 15) and fall below 2600 dollars.

According to Bank of America data, last week (from November 11 to 15), gold funds saw an overall outflow of nearly 1.6 billion dollars, the largest single-week outflow since July 2022, and the largest monthly decline in nearly three years, reaching a drop of nearly 7%.

However, gold has shown a strong rebound this week, the largest asset management in the spot gold etf $SPDR Gold ETF (GLD.US)$ Yesterday, it stopped falling and rose by 1.9%; the gold stocks in the Hong Kong and U.S. stock markets surged. $CHINAGOLDINTL (02099.HK)$ On the 3rd, it rose over 25%. $Harmony Gold Mining (HMY.US)$ Yesterday it closed up nearly 8%, and pre-market it rose nearly 5% again.

Goldman Sachs believes that the unprecedented escalation of trade tensions and the growing concerns over inflation and fiscal risks will lead to an increase in demand from speculative positions and etf.

Other analysts point out that in the long term, the Fed's interest rate cut cycle and the high burden of U.S. government debt will be difficult to change in the short term, and the support from central bank gold purchases will further enhance the attractiveness of the gold market.

Is gold capital fleeing for profits? It’s just that there are better asset choices.

The World Gold Council in its latest report analyzes that the outcome of the U.S. election has impacted the upward trend of gold prices, as Trump's proposed economic plan will lead to massive deficits and "re-inflation risks" in the U.S.

At the same time, various data from October indicate that the U.S. economy is in good shape, inflation has eased, and the combination of future inflation's repeated uncertainties has led to a slowdown in the Fed's interest rate cut pace.

The election results combined with a "soft landing" for the economy short-term support the strengthening of u.s. treasury notes yield and the dollar, which is known as the benchmark. $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ It skyrocketed to 4.5%, and the price of u.s. treasury notes fell sharply.

Of course, the decline in gold prices this month does not mean that the factors supporting its price have disappeared; rather, more attractive assets than gold have emerged, leading speculative funds to outflow from gold for profit.

After Trump's victory, gold plummeted while cryptos surged. $Bitcoin (BTC.CC)$ During the same period of gold's decline (from November 6 to 15), it rose by 31.17%, and its total market value surpassed silver, becoming the eighth largest asset in the world.

"A key factor after Trump's victory is that we might see a reduction in regulation on cryptos. This speculative demand is likely to draw some funds away from gold and shift to cryptos," said Kristina Hooper, Chief Global Market Strategist at Invesco Advisers.

Should we continue picking people up in reverse or stop here? Inflation and the u.s. fiscal deficit remain key issues.

Despite a short-term pullback in gold prices, the logic supporting the long-term rise in gold prices remains unchanged, namely global central bank interest rate cuts, demand for gold purchases, and safe-haven investment, whether for inflation hedging or geopolitical factors.

On November 18, goldman sachs stated that the sale of gold provides a good buying opportunity due to global central banks buying gold and the interest rate cuts in the usa, predicting that gold prices will reach $3,000 by December 2025.

The bank also added that trump's second term could support a rise in gold prices, as increasing concerns about the sustainability of the u.s. fiscal policy will also boost gold prices. Central banks around the world - especially those that hold a large amount of u.s. treasury notes - may choose to buy more gold.

Karen Ward from jpmorgan also pointed out relevant risks, stating, 'In this world of rising government debt, we should be worried. We should be concerned about medium-term inflation.'

It is worth noting that the actions of trump and musk have once again buried 'uncertainty' regarding inflation and deficits, such as the establishment of a 'government efficiency department', weakening central bank influence, and significant tax cuts, deliberately mimicking argentinian president milei's 'big knife and axe' approach.

According to reports from cctv news, on the afternoon of November 12 local time, the argentinian national statistics bureau released data showing that the inflation rate for October was 2.7%, with a cumulative inflation rate of 107% for the first ten months of this year.

The spot gold etf may better track gold prices.

This year, constrained by the costs of gold mining and disruptions on the company's operation side, during the phase of soaring gold prices, the performance of golden industrial concepts and gold stocks etf has been inferior to that of spot gold. Therefore, ETFs that track spot gold prices have become the choice for investors to quickly invest in gold.

For example, tracking the spot gold price $SPDR Gold ETF (GLD.US)$ The asset management scale is approximately 73.041 billion USD, making it the largest gold exchange-traded fund (ETF). In the first 10 months of this year, its increase was 32.61%, while spot gold prices rose by 33% during the same period.

Of course, there are also ETFs that track the spot gold price. $Gold Trust Ishares (IAU.US)$ 、 $Spdr Gold Minishares Trust (GLDM.US)$ 、 $Abrdn Gold ETF Trust (SGOL.US)$ 、 $Goldman Sachs Physical Gold ETF (AAAU.US)$ 、 $VanEck Merk Gold ETF (OUNZ.US)$ The price increase over the past 10 months was 32.82%, 32.95%, 32.78%, 32.88%, and 32.77% respectively.

The price increase of these spot gold etfs is almost in line with the spot gold price, with the difference being that they track gold prices in different markets. For example, $SPDR Gold ETF (GLD.US)$、 $VanEck Merk Gold ETF (OUNZ.US)$ The tracked symbol is the London gold spot price. $Abrdn Gold ETF Trust (SGOL.US)$ The tracked symbol is the swiss franc gold spot price.

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Editor/Rocky