Core Viewpoint - Gold is challenging the foundation of the modern financial system, specifically U.S. Treasury bonds, as its share in central bank reserves has surpassed that of U.S. debt for the first time since 1996, indicating a significant shift in global reserve asset strategies [1][4]. Central Bank Behavior - Central banks are strategically adjusting their reserve asset structures, moving from U.S. dollar bonds to physical assets like gold to reduce reliance on dollar assets and mitigate potential risks [2][4]. - The World Gold Council (WGC) reports that global central banks have net purchased gold for 14 consecutive quarters, with annual purchases exceeding 1,000 tons, nearly double the previous decade's average [4][7]. Gold Market Dynamics - Gold is currently in its third major bull market, with prices rising 36% this year, significantly outperforming the S&P 500 and Bitcoin [9][12]. - Historical context shows that gold prices surged during periods of financial instability, such as the 1970s and the 2000s, driven by inflation and economic crises [12][13]. U.S. Treasury Bonds - The bond market is experiencing a downturn, with long-term U.S. Treasury yields reaching levels not seen in decades, leading to a significant drop in bond prices [15][17]. - The current decade is projected to be one of the worst for U.S. Treasury bonds, with a notable increase in yields and a corresponding decrease in bond market value [17][18]. Future Outlook - Major financial institutions are bullish on gold prices, with forecasts suggesting prices could reach between $3,675 and $4,500 per ounce by 2026, reflecting concerns over the future of U.S. Treasury bonds and macroeconomic risks [19].

Core Viewpoint - Gold is challenging the foundation of the modern financial system, specifically U.S. Treasury bonds, as its share in central bank reserves has surpassed that of U.S. debt for the first time since 1996, indicating a significant global rebalancing in reserve asset structures [2][6]. Group 1: Central Bank Behavior - Central banks are increasingly accumulating gold to reduce reliance on U.S. dollar assets, thereby diversifying potential risks associated with a single reserve currency [2][10]. - Since Q3 2020, global central banks have net purchased gold for 14 consecutive quarters, with annual purchases exceeding 1,000 tons, nearly double the average of the previous decade [6][10]. - A recent survey indicated that 95% of central banks plan to continue increasing their gold reserves in the next 12 months, the highest percentage since the survey began in 2019 [8]. Group 2: Gold Market Dynamics - Gold is currently in its third major bull market, with prices rising 36% this year, significantly outperforming the S&P 500 and Bitcoin [11][15]. - Historical context shows that gold has previously surged during major financial upheavals, such as the 1970s and the 2008 financial crisis, making it a preferred asset for hedging against inflation and currency devaluation [14][15]. Group 3: U.S. Treasury Bonds - The bond market is experiencing a downturn, with long-term U.S. Treasury yields reaching levels not seen in decades, leading to a significant drop in bond prices [16][18]. - The current decade is projected to be one of the worst for U.S. Treasury bonds, with rising yields reflecting market concerns over inflation and debt sustainability [18][19]. - The perception of U.S. Treasury bonds as "risk-free" has shifted, requiring higher risk premiums to attract investors, while safe-haven funds are increasingly moving towards gold [19]. Group 4: Future Price Predictions - Several financial institutions are bullish on gold prices, with forecasts suggesting prices could reach $4,000 per ounce by mid-2026, driven by macroeconomic risks and potential political pressures on the Federal Reserve [20].