Core Viewpoint - The gold market remains robust, supporting prices around $4200 per ounce, with a notable scarcity of sellers and a trend of investors choosing to hold rather than take profits, indicating gold's long-term strategic role in asset allocation [1] Group 1: Institutional Investment Trends - Some asset management firms have significantly increased their gold allocation, with Tanglewood Total Wealth Management raising its gold holdings to approximately 12%, surpassing the initial target of 10% [2] - This shift reflects a profound change in institutional investors' asset allocation philosophy, moving from tactical short-term gains to strategic long-term holdings in gold [2] - Despite potential short-term sales, the long-term value of holding gold is widely recognized among investors [2] Group 2: Factors Driving Gold Demand - One key factor driving gold demand is the rising level of global sovereign debt, with gold transitioning from a traditional "disaster hedge" to a "currency hedge" amid declining fiat currency purchasing power [3] - The strategic position of gold in the global financial system has been increasingly highlighted since the 2008 financial crisis and the subsequent fiscal stimulus measures during the COVID-19 pandemic [3] - The geopolitical use of the dollar and increasing global trade tensions have diminished its reliability as a reserve currency, further emphasizing gold's unique value as a "non-sovereign currency" [3] Group 3: Long-term Value of Gold - Despite a nearly 60% increase in gold prices this year, GTC believes that investment demand will not weaken, as gold remains undervalued relative to major stock markets in a high-debt, low-growth macro environment [4] - Gold is entering a new phase of long-term value reassessment, solidifying its core position in global investment portfolios [4] - In the context of macroeconomic uncertainty, gold will continue to play a crucial role in wealth preservation, asset protection, and currency hedging, providing stable long-term returns for investors [4]

Core Viewpoint - Gold should be viewed as a strategic asset for macro hedging, currency hedging, and obtaining stable long-term returns, rather than a tactical tool for short-term gains [4] Group 1: Long-term Returns - Over the past 20 years, gold has achieved an annualized return exceeding 10% when calculated in RMB, outperforming most mainstream assets over 10 and 5-year periods [8] - The long-term performance of gold is primarily driven by global GDP growth and physical gold demand, including central bank purchases, financial investments, and technological uses [8] Group 2: Currency Hedging - Gold is a globally priced asset that does not rely on any country's or institution's credit backing, making it a hedge against all fiat currencies in the context of global monetary expansion [12] Group 3: Systemic Risk Mitigation - Historical data shows that during market corrections in traditional stock-bond portfolios, gold tends to perform well, providing investors with a buffer against systemic risks [16]

Group A - Gold has emerged as one of the best-performing assets in recent years, with a 28% increase in 2024 and over 25% since 2025, leading financial institutions to launch "Gold+" multi-asset strategy products [1] - The "Gold+" strategy is increasingly recognized by asset management institutions and favored by individual investors, indicating a shift in gold's role from a tactical tool for asset allocation to a strategic core holding [1] Group B - Gold should be viewed as a strategic core holding for macro hedging, currency hedging, and achieving stable long-term returns, rather than a tactical tool for short-term gains [1] - The current macro environment and external shocks significantly impact the overall performance of RMB assets (equities, fixed income) beyond the variables of individual assets [1] Group C - Over the past 20 years, gold has provided an annualized return of over 10% when calculated in RMB, outperforming most mainstream assets over 10-year and 5-year periods [3] - The long-term returns of gold are primarily driven by global GDP growth and physical gold demand, including central bank purchases, financial investments, gold bars and coins, jewelry, and technological uses [3] Group D - Gold serves as a global pricing asset that does not rely on any country's or institution's credit backing, making it a hedge against currency fluctuations [6] - In the context of global monetary expansion, gold can act as a hedge against all credit currencies [6] Group E - Historical data shows that when traditional stock-bond portfolios (50% stocks, 50% bonds) experience a downturn due to systemic risks, gold tends to perform well, providing investors with a buffer against risk [9] - Gold's demand is diverse and driven by global factors, resulting in low correlation with domestic assets, effectively reducing the impact of systemic risks on traditional stock-bond portfolios [9]

Group 1 - The core viewpoint is that gold is transitioning from a "tactical tool" for short-term gains to a "strategic core" for long-term investment, as evidenced by its significant price increase of 28% in 2024 and over 25% since 2025 [1][2] - The current macroeconomic environment and external shocks, such as tariffs and geopolitical conflicts, have a greater impact on RMB assets than on individual asset variables, indicating a need for a strategic approach to asset allocation [2] - Gold has provided a long-term annualized return of over 10% over the past 20 years, outperforming most mainstream assets in 10-year and 5-year dimensions, driven by global GDP growth and diverse demand sources [6][8] Group 2 - Gold serves as a hedge against currency fluctuations, being a globally priced asset that does not rely on any country's credit, making it a valuable tool in the context of global currency overproduction [10] - Historical data shows that gold performs well during market corrections in traditional stock-bond portfolios, providing a buffer against systemic risks due to its low correlation with domestic assets [11][12]

Group 1 - The long-term rebound of the euro is expected to squeeze profits and revenues for European companies, particularly exporters facing challenges from the strong euro and U.S. tariffs [1][4][5] - Major European companies such as SAP, Porsche, Heineken, and Schneider Electric have warned investors about the potential impact of the strong euro on their earnings [1][4][5] - The euro has appreciated over 9% against the dollar, reaching a three-year high, which raises concerns about further euro appreciation and its effects on European export competitiveness [1][4][6] Group 2 - Analysts predict that the strong euro could lead to a significant reduction in profit expectations for major European exporters, with HSBC lowering profit growth forecasts for the FTSE Europe Index companies to 2.9% [4][5] - SAP's CFO indicated that a 0.01 USD increase in the euro to dollar exchange rate could reduce the company's annual revenue by 30 million euros, highlighting the direct financial impact of currency fluctuations [5] - Heineken and Schneider Electric also reported potential profit reductions due to the strong euro, with estimates of 180 million euros and 1.25 billion euros respectively [5][6] Group 3 - The strong euro is seen as a double-edged sword for European trade, benefiting imports but posing challenges for exports, particularly in the context of the current international economic environment [2][4] - The euro's rise is partly attributed to the weakening of the dollar, as investors seek alternative safe-haven assets amid uncertainties surrounding U.S. economic policies [7] - The overall performance of European stocks has been negatively affected by the euro's strength, with key companies underperforming compared to the broader European market [6][7]

Core Insights - The once successful strategy of investing in US stocks while holding dollars has faced significant challenges due to the recent decline in the dollar and the S&P 500 index, leading to substantial losses for foreign investors [1][3]. Group 1: Market Performance - The S&P 500 index has dropped by 6% this year, while foreign investors, when accounting for the nearly 8% decline in the dollar, have experienced losses of approximately 14% [1]. - The volatility in US markets and the unpredictable nature of White House policies have created unprecedented anxiety among investors who previously viewed the US as a safe haven [1]. Group 2: Hedging Strategies - Investors are increasingly seeking to hedge against currency risks, with approximately $18 trillion in US stock portfolios now being considered for additional currency hedging measures [3]. - Major financial institutions like Morgan Stanley and Bank of America report a rise in clients purchasing protective assets against dollar depreciation [3]. Group 3: Cost of Hedging - The cost of hedging against dollar depreciation varies, with annualized costs around 4% for investors in Swiss francs or yen, and over 2% for euro investors [4]. - While hedging can mitigate losses from a declining dollar, it also limits potential gains from a rising dollar, leading to a complex trade-off for investors [4]. Group 4: Future Outlook - Concerns are growing about the potential withdrawal of international investors from the US market, with Allianz suggesting that even a small outflow from the estimated $28 trillion in international investment could significantly impact exchange rates and global asset prices [5]. - Analysts predict a continued strength of the euro against the dollar, with estimates suggesting the euro could rise to 1.30 against the dollar by the end of 2027, a level not seen in a decade [5].

Core Viewpoint - U.S. multinational companies are extending their currency hedging periods to protect cash flows from potential exchange rate fluctuations caused by the tariffs imposed by the Trump administration, reflecting increased uncertainty in the global trade landscape [1][2]. Group 1: Currency Hedging Adjustments - The adjustment in hedging periods indicates that multinational companies are facing heightened uncertainty amid concerns over economic recession and a weakening dollar [1]. - Following the announcement of higher-than-expected global tariffs on April 2, volatility in the foreign exchange market surged, leading to unrealized losses in some companies' hedging positions [1]. - Companies that have managed to withstand volatility are also beginning to extend their hedging periods, with some clients extending to the maximum available duration to lock in protective measures [1][2]. Group 2: Rising Costs of Short-term Hedging - The increase in volatility has raised the costs of short-term hedging tools, prompting companies to extend their hedging periods [2]. - Implied volatility for one-month and three-month parity options has increased by 72% and 46% respectively since April 2, leading to higher costs for companies to mitigate potential short-term losses [2]. Group 3: Shift in Options Strategy - The impact of tariffs has disrupted market expectations for the euro, with a stronger euro increasing operational costs for U.S. companies with significant sales in Europe [3]. - Companies are increasingly building protective mechanisms, particularly those needing to purchase goods and materials priced in euros [3]. - There is a growing demand for "window forward contracts," which combine the advantages of forward contracts with flexible execution times, suitable for companies facing cash flow uncertainties [3]. - More clients are shifting from forward hedging to options strategies to gain greater flexibility amid ongoing trade tensions [3].