Core Viewpoint - The Federal Reserve's recent interest rate cut of 25 basis points signals potential changes in the gold market, with expectations of two more cuts in 2025, which is seen as a positive sign for gold investors [1] Group 1: Gold Market Dynamics - Gold has emerged as a favored investment haven amid escalating trade wars and rising U.S. debt levels, with significant inflows into gold-backed ETFs, reaching the highest total holdings since June 2023 [2] - Central banks have been key drivers of gold price increases, with global central bank purchases exceeding 1,000 tons for the third consecutive year in 2024, currently holding about 20% of all mined gold [2] - The geopolitical tensions, particularly the freezing of Russian central bank assets, have prompted countries to reassess their reserve asset allocations, leading to increased gold reserves in nations like China since 2022 [2] Group 2: Economic Influences on Gold - The pressure exerted by former President Trump on the Federal Reserve has diminished its independence, impacting the credibility of the U.S. dollar as a global reserve currency [3] - Despite the dollar's challenges, U.S. equities have performed well, driven by advancements in AI and strong fundamentals of tech companies, creating a rare correlation between gold and stock market performance [3] - Gold prices typically exhibit a negative correlation with real interest rates, suggesting that expectations of interest rate cuts could enhance gold's short- to medium-term performance [3] Group 3: Investment Strategies - Direct investment in physical gold may not be the best option for individual investors due to the complex mechanisms of the gold market, which includes various trading platforms and potential liquidity issues [4] - Gold ETFs provide a more convenient investment avenue for individuals, offering high liquidity and ease of trading, while gold mining stocks can offer leveraged exposure to rising gold prices [4] - The New York Stock Exchange's gold mining index reached a historical high in 2025, and A-share gold ETFs outperformed their counterparts during the same period [4] Group 4: Strategic Considerations - In light of potential structural changes in the global financial system, a moderate allocation to gold may be more necessary than ever, with investors encouraged to view gold as part of a broader investment strategy rather than a speculative tool [5] - The core rationale for investing in gold should focus on wealth protection rather than high returns, emphasizing its role in an overall investment strategy [5]