Currency crisis emerges, what are the trends for gold and silver?

Over the past two decades, global central banks have continued to increase their foreign exchange reserves, and their overall risk resilience has significantly improved. However, market confidence is often influenced by price performance.

From a medium- to long-term perspective, strong physical gold demand in Asian markets will become a key force supporting gold and silver prices after market liquidity adjustments take effect. According to the latest data from the World Gold Council, Indonesia's demand for gold bars and coins surged by 47% in the first quarter of this year compared to the same period last year, with the public clearly viewing physical gold as the best tool to hedge against the depreciation of the rupiah and inflation. Locally, gold bars are priced in Indonesian rupiah, with long-term premiums maintained between 7% and 14%. In crisis environments, market enthusiasm for buying gold increases further. Meanwhile, demand for gold investment in countries such as India and Thailand has also strengthened simultaneously. Even though high gold prices have somewhat suppressed jewelry consumption, investment demand remains particularly strong.

Therefore, this Asian currency crisis is likely to first bring significant fluctuations to gold and silver prices: in the short term, a strong US dollar will suppress prices and lead to a noticeable correction; once this adjustment is completed, and physical buying data from Asia is gradually confirmed, capital flows back into gold and silver will become more pronounced, driving another wave of rebound.

Editor | Jiao Yang   Layout | Jiao Yang   Visuals | Zhang Zongwei 

Proofreading | Wang Bei   Review | Ni Jinhe