Gold prices have experienced significant volatility after reaching historic highs this year. How should investors assess gold's investment value? Huaan Fund's Chief Index Investment Officer Xu Zhiyan recently shared insights at the "Shanghai Stock Exchange Chief Forum," highlighting three key factors supporting gold's long-term bullish trend.
Three Key Drivers Behind Gold's Long-Term Growth
Since 2019, gold has steadily attracted global capital, with prices surging nearly 60% on COMEX by June 2025. Xu Zhiyan identifies these primary drivers:
- Central Bank Gold Purchases
As a scarce precious metal, gold's finite reserves—estimated to last only about a decade at current extraction rates—face rising demand. This marginal demand surge is a major price catalyst. - Global Geopolitical Uncertainty
Events like the Ukraine crisis and Middle East conflicts have fueled避险 demand, prompting investors to allocate more to gold. - Weakening USD Credit System
While the dollar remains dominant in global trade, high debt pressures and trade conflicts undermine long-term confidence, diverting funds to gold.
👉 Why gold is a must-have in your 2025 portfolio
Strategic Investment Approaches
Xu emphasizes avoiding短期博弈 (short-term speculation):
- Gold's pricing involves complex factors—long-term fundamentals, short-term dynamics, and market psychology.
- Investors should resist追涨杀跌 (panic buying/selling) to prevent losses.
On stablecoins' impact:
- Gold's实物支撑 (physical backing) and央行的储备 (central bank holdings) differentiate it from cryptocurrencies. Stablecoins may反而 highlight gold's safety.
Asset Allocation Recommendations
- Diversify: Include gold in portfolios for risk dispersion.
- Long-Term Focus: Huaan Gold ETF data shows users with longer holding periods achieve better outcomes.
Investor Caution
Xu warns against potential scams:
Only trust:
- 实物金 (physical gold)
- 积存金 (accumulated gold)
- 黄金ETF (gold ETFs)
- Avoid unregulated "paper gold" or交易特征 (trading-scheme) products.
FAQs
Q: Is now a good time to buy gold?
A: Yes, given central bank demand and USD volatility, but focus on long-term holding.
Q: How much of my portfolio should be gold?
A: 5–15%, adjusted for risk tolerance and market conditions.
Q: Can cryptocurrencies replace gold?
A: Unlikely—gold's historical stability and institutional adoption make it unique.