Group 1 - The surge in gold prices, breaking the $3400 per ounce mark, reflects deep-seated global investor anxiety regarding economic prospects [1][3] - The recent increase in gold purchases by central banks, up 37% year-on-year in May, indicates a growing trend of countries accumulating gold as a hedge against currency credit concerns [3] - Geopolitical tensions, particularly in the Middle East and rising right-wing movements in Europe, are contributing to the demand for gold as a safe haven asset [3] Group 2 - Silver's recent price increase is driven by its industrial demand, particularly in solar energy, where it accounts for over 50% of its usage [4] - The spike in silver prices is also linked to the shift of funds from gold to silver, as the gold-silver ratio currently stands at a historical high of 85:1, suggesting potential for silver to catch up [5] - The silver market's smaller size makes it more susceptible to speculative trading, as evidenced by a 12% increase in open interest for silver futures [6] Group 3 - Despite the bullish sentiment, there are concerns about potential market corrections if the Federal Reserve signals a more aggressive interest rate path [7] - Technical indicators show that both gold and silver are in overbought territory, with historical data suggesting a high probability of price corrections following significant daily gains [7] - The potential tightening of global liquidity, particularly if the Bank of Japan reduces its bond purchases, could negatively impact precious metals [7] Group 4 - Forecasts for gold prices vary, with Goldman Sachs raising its three-month target to $3550 due to geopolitical risks, while Morgan Stanley suggests that current prices already reflect these risks and recommends profit-taking [8] - A cautious approach is being adopted by some investors, with strategies to maintain long positions in gold while adjusting stop-loss levels, indicating a nuanced market sentiment [8] - The discussion around gold among retail investors may signal a nearing peak in the current market cycle, while central banks may view the $3400 level as a new baseline for foreign reserves [8]

Core Viewpoint - The article discusses the impact of the U.S. debt ceiling on Treasury supply and liquidity, predicting a potential increase in 10-year Treasury yields to 4.8% after the debt ceiling issue is resolved, driven by supply-demand imbalances and resilient inflation [1][2]. Group 1: Economic and Policy Analysis - Since mid-January, the debt ceiling has limited Treasury supply, leading to a liquidity turning point and a decrease in the 10-year yield from 4.8% to around 4.2% [1]. - The uncertainty surrounding Trump's policies has negatively impacted market confidence, but recent data suggests economic resilience, with stable housing demand and a rebound in job creation [4][14]. - The article anticipates that the pessimistic sentiment regarding the economy may bottom out in the second quarter, aided by the potential implementation of tax cuts and deregulation policies [4][5]. Group 2: Fiscal Outlook - The fiscal deficit has not shown signs of reduction, with the cumulative deficit for the first five months of the fiscal year reaching $1.15 trillion, compared to $828.1 billion in the same period last year [18][20]. - The proposed "One Big Beautiful Bill" could further increase the deficit, with a projected net increase of approximately $2.8 trillion in the basic deficit by 2034 [24][25]. Group 3: Monetary Policy and Liquidity Risks - The article highlights that the debt ceiling has led to a tightening of liquidity, with the Federal Reserve preparing for potential liquidity risks as the debt ceiling is expected to be resolved by June [27][28]. - The Fed has already begun to slow down its balance sheet reduction, decreasing the monthly reduction from $250 billion to $50 billion [28]. Group 4: Supply and Demand Analysis - The supply of Treasuries is expected to increase post-debt ceiling resolution, with projected net financing of approximately $1.4 trillion in the third quarter [27][33]. - Demand for Treasuries remains weak, with significant reliance on money market funds, while foreign demand has decreased, particularly from key countries like Japan and the UK [36][39]. Group 5: Interest Rate Projections - The article predicts that long-term interest rates will continue to rise, potentially exceeding 4.8% after the debt ceiling is resolved, due to increased supply and persistent demand shortages [45][46]. - The anticipated economic recovery and potential tax cuts may support higher nominal growth rates, which could lead to an increase in interest rates [47][58].