Core Insights - The People's Bank of China has increased its gold reserves for 11 consecutive months from November 2024 to September 2025, reaching a historical high, reflecting a strategic and stable approach to asset management [1][7] Group 1: Nature of Gold as an Asset - Gold is characterized as a "zero-yield dividend" asset, providing inherent hedging value rather than high returns, which contrasts with the systemic risks associated with reliance on the US dollar [2] - The correlation between gold and mainstream assets remains low, below 0.15, indicating its role as a stabilizing asset in national portfolios [2] Group 2: Strategic Consistency in Asset Allocation - The central bank's consistent gold purchasing strategy over the past 11 months contrasts with the rising inflow of physical gold into global ETFs, which reached 145.6 tons in September, marking a yearly high [3] - This disciplined approach to gold acquisition serves to smooth costs and positions gold as a strategic asset rather than a trading tool [3] Group 3: Transition from Credit to Physical Assets - Shifting reserves from sovereign credit bonds to non-credit physical assets like gold enhances financial autonomy and resilience in a high-debt environment, embedding a "zero credit risk" asset in the balance sheet [4] - This transition provides a clear strategy for individual asset allocation, emphasizing the importance of holding physical or hard currency assets to mitigate counterparty risks [4] Group 4: Insights for Rational Investors - Investors should recognize gold's primary function as a risk hedge and stabilizer in asset portfolios rather than a high-yield investment tool [5] - Regular and disciplined investment strategies can help mitigate the emotional challenges of market timing, addressing the fear and greed that often drive trading decisions [6] - Avoiding leveraged speculation is crucial, as the central bank's gold purchases are made without leverage, suggesting that individual investors should also steer clear of such risks [6]