A Series of Analytical Frameworks on the Performance of Major Asset Classes During a Rate-Cutting Cycle

With the Federal Reserve officially launching its rate-cutting cycle in October 2025, global major asset classes are set to enter a new pricing cycle. This series of analyses will cover five major asset classes: gold, silver, A-shares, U.S. stocks, and commodities. As the first installment in the series, this article focuses on the macro investment logic behind gold.

The core challenge in gold investing lies not in short-term price fluctuations, but in investors’ cognitive biases regarding macro trends. After gold broke through the $3,000 per ounce mark in 2024, the market was flooded with calls for panic selling—a phenomenon rooted in the fact that most investors lack a clear analytical framework for gold.

Three Typical Characteristics of Anxiety in Gold Investing

If you find yourself in a constant state of anxiety while investing in gold, you likely fall into one of the following three categories:

  1. Failing to establish a long-term macro analytical framework and making decisions based solely on short-term price fluctuations
  2. Treating gold as if it were a stock and engaging in high-frequency trading, repeatedly chasing rallies and cutting losses
  3. Lacking an independent decision-making logic and blindly following various market opinions

The only way to overcome this anxiety is to establish a macro analytical system for gold, forming a stable judgment logic based on both the timeline and driving factors. This article begins by examining the long-term trend logic of gold from the timeline perspective.

Confirmation of the Long-Term Bullish Logic for Gold in 2022–2023

The weekly chart of New York gold futures shows that two key support levels formed during 2022–2023. These two positions serve as the core basis for confirming the long-term bull market in gold:

  1. The first support level is the lower boundary of the 2022 trading range, corresponding to the price low following the outbreak of the Russia-Ukraine conflict
  2. The second support level is the W-bottom structure formed at the end of 2023, which can also be viewed as a “break-and-reverse” pattern

The validity of these two support levels directly determines the direction of gold’s price movement over the next five years. If these levels are effectively breached, gold may repeat the long-term downtrend seen in 2013. However, based on actual price action, both support levels have withstood multiple bearish tests, confirming the long-term bullish logic.

The Core Reason Behind Gold’s Unusual Decline Following the 2022 Russia-Ukraine Conflict

The Russia-Ukraine conflict erupted on February 24, 2022, and on February 26, the U.S., in conjunction with Western nations, expelled Russia from the SWIFT system. According to conventional logic, a geopolitical shock of this magnitude should have driven gold prices significantly higher; however, the actual price action saw a six-month decline beginning in April 2022.

The core reason for this anomalous trend lies in the U.S.’s preemptive planning for sanctions. Judging by the efficiency of the SWIFT sanctions’ implementation, the U.S. clearly knew in advance when the conflict would erupt and had simultaneously positioned itself to short the gold market. This pattern—where “expectations turning into reality immediately become bearish”—is a common macro-trading characteristic in the gold market.

Timeline of Gold Position-Building Signals in 2024

Clear signals to increase gold positions emerged in the second half of 2024, and I publicly highlighted these opportunities at multiple key points:

  • August 4: Indicated that Wall Street’s short positions in gold had exhausted both their time and price potential, suggesting it was time to begin establishing long positions
  • August 8: Confirmed that the US Dollar Index had staged a false breakout, signaling that gold’s upward rally was about to begin
  • August 9: Released a video script in advance, indicating that gold was poised to begin an uptrend
  • August 10: Published a video explicitly advising to go long on gold
  • September 1: Indicated that gold would continue its upward trend
  • September 19: Advised holding gold positions unchanged, noting an extremely high probability of an uptrend; gold began a sharp rally on the very next trading day

As a major asset class, gold’s price movements exhibit strong trend-following characteristics. It does not experience sudden, sharp crashes like stocks, so there is no need to be overly anxious about short-term fluctuations. As long as there is no fundamental shift in the macro trend, the core rationale for holding gold remains unchanged.

Explanation of the Follow-up Analysis Framework

This is the first article in a series of macroeconomic analyses on gold, primarily outlining the long-term trend logic of gold from a temporal perspective. Subsequent articles will analyze the core macroeconomic factors driving gold prices from a horizontal perspective, including the trend of the U.S. Dollar Index, changes in real interest rates, and global central bank gold purchases. The entire series of analyses on major asset classes will also cover the investment logic behind silver, A-shares, U.S. stocks, and commodities, with subsequent articles to be released gradually.