The core contention in the current market lies in betting on which economic signal will ultimately dominate the Federal Reserve’s decision-making—whether to cut interest rates in response to a potential recession or to tighten policy further to suppress inflation. This is not only the divergence point in the pricing logic of gold and U.S. Treasuries but will also determine the short-term trajectory of major asset classes.
According to Zhitong Finance APP, Guotai Junan International released a research report stating that over the past 12 months, the price of gold surged above USD 4,300, while the US dollar exchange rate continued to weaken. Discussions about “devaluation trades” in the market have intensified. However, outside the frenzy of “devaluation trades,” the US Treasury bond market, which should be most sensitive to inflation risks, remained unusually calm, with its core long-term inflation expectation indicator still…
