Core Viewpoint - Recent global financial markets have shown an unusual pattern where gold, traditionally viewed as a safe-haven asset, has declined alongside risk assets like U.S. stocks and Bitcoin, indicating a potential restructuring of investor behavior towards traditional safe-haven logic [2] Group 1: Asset Correlation and Market Dynamics - Last Friday, international spot gold fell over 3%, nearing $4030 per ounce, while the S&P 500 index dropped 1.3%, and Bitcoin fell below $95,000, breaking the traditional pattern where gold would attract safe-haven funds during risk asset declines [3] - The Wmax analysis team identified short-term liquidity demand as the primary driver of this unusual correlation, as investors liquidate gold positions to raise cash amid stock market sell-offs [3][5] - The rolling correlation between the most active gold futures and the S&P 500 index was 0.22, indicating a slight positive correlation, with an overall mild positive correlation maintained from October to November [5] Group 2: Federal Reserve Policy and Economic Uncertainty - Hawkish comments from the Federal Reserve have significantly altered market expectations for interest rate cuts, which has been a key factor suppressing gold prices [6] - The probability of a 25 basis point rate cut in December has dropped to 49%, down from 64% earlier in the week, reflecting a shift in market sentiment [6][8] - The recent U.S. government shutdown has disrupted the release of key economic data, further increasing uncertainty around policy expectations, which is critical for gold as a non-yielding asset [8] Group 3: Market Liquidity and Technical Factors - Recent fluctuations in gold prices have been influenced by liquidity conditions and technical factors, including a "gamma squeeze" where traders are forced to buy gold futures to hedge risks [9] - Weak physical demand for gold in major Asian markets has also contributed to limiting upward momentum, with Indian market discounts reaching their highest level in five months [9] Group 4: Long-term Outlook and Investment Strategy - Despite short-term volatility, the long-term outlook for gold remains positive, with historical data showing that gold tends to recover faster than equities after downturns [12] - Gold has risen nearly 60% year-to-date, potentially marking its best annual performance since 1979, underscoring its long-term investment value [12] - Wmax advises investors to focus on asset diversification and to monitor signals from the Federal Reserve, economic data recovery, and changes in global market risk appetite [12]