Core Viewpoint - Recent fluctuations in gold prices, including a drop of over 3% below $4000 and $3900, are driven by multiple factors, raising questions about the long-term investment logic of gold and how investors should position themselves [1][3]. Group 1: Factors Driving Gold Price Movements - Concerns over the U.S. dollar credit system have intensified, with the national debt exceeding $37 trillion, marking a historical peak in GDP ratio since World War II, and risks of government shutdown exacerbating market fears [3]. - Escalating trade tensions, particularly between the U.S. and China, have heightened risk aversion, increasing gold's appeal as a traditional safe-haven asset [3]. - Central banks globally are returning to a loose monetary policy, with a 90% probability of further rate cuts anticipated by the market following the Federal Reserve's recent actions [3]. Group 2: Market Sentiment and Technical Analysis - The gold market may have entered a high-level consolidation phase, with short-term sentiment indicators suggesting overheating, which could lead to increased volatility [5]. - Some short-term factors that supported previous price increases are reversing, such as easing U.S.-China tensions and stabilizing European political conditions, which may lead to significant price fluctuations in the future [7]. Group 3: Long-term Outlook and Institutional Predictions - Despite short-term volatility, the long-term logic for gold as a reserve asset remains intact, with 95% of surveyed central banks planning to increase their gold holdings in the next 12 months [7]. - Global gold ETFs saw a net inflow of 145.6 tons in September 2025, bringing total holdings to 3837.7 tons, indicating strong ongoing demand [7]. - Historical comparisons show that gold has experienced significant long-term price increases, suggesting potential for further appreciation in the current cycle [7]. Group 4: Investment Strategy Recommendations - Investors are advised to focus on strategic allocation rather than short-term speculation, with a recommendation to allocate approximately 15% of their portfolio to gold as a hedge against currency credit risks and geopolitical uncertainties [11]. - Gold-related funds are suggested as a preferred investment vehicle due to their liquidity and lower entry barriers, while physical gold and futures are recommended for more knowledgeable investors [11].