Gold breaks through the $4,500 mark, with institutions optimistic about challenging the $5,000 level

Global financial markets are currently experiencing an epic rally in safe-haven assets. Spot gold has broken through the $4,500 per ounce level for the first time, while silver has surged above $72, setting new historical records. Priced in AUD, gold is approaching the AUD 5,000 mark, reflecting strong global demand for safe-haven assets. This surge in precious metals not only sweeps through global markets but also ignites Taiwanese investors’ enthusiasm for allocation, with related ETFs experiencing increased trading volume and scale.

Gold and Silver Soar Together, Driven by Supply and Demand

Since the beginning of this year, gold has risen over 70%, while silver has approached an astonishing 150% increase, potentially marking the largest annual growth in history. This rally is not accidental; multiple driving forces are behind it:

Rising Risk Aversion: The ongoing Ukraine-Russia conflict and geopolitical tensions continue to ferment, strengthening market demand for safe-haven assets. Central banks worldwide are also increasing gold reserves, providing long-term buying support for gold prices.

Monetary Policy Shift: The U.S. labor market has clearly cooled, and markets widely expect the Federal Reserve to initiate a rate cut cycle next year, which is bullish for non-dollar assets. In a rate-cut environment, the relative attractiveness of non-yielding gold increases.

Industrial Demand for Silver Expanding: Besides its traditional safe-haven properties, silver’s demand continues to rise due to high-tech industries such as AI chips and solar panels. Global silver supply has been tight for five consecutive years, and the supply-demand gap is a key support for price increases.

Foreign Investors Applaud, $5000 Becomes Consensus Target

Major international financial giants like Goldman Sachs, JPMorgan Chase, and Deutsche Bank are raising their gold price forecasts, generally believing 2025 will be a critical year for gold to break through the $5,000 level. JPMorgan Chase even boldly estimates a target price of $5,055, with optimism that it could reach $5,400 by 2027.

Bridgewater founder Ray Dalio and renowned hedge fund manager Ken Griffin have recently publicly stated that, amid rising global economic and political uncertainties, gold’s hedging ability may outperform the dollar. They advise investors to include a certain proportion of gold in their asset allocation as a defensive asset.

Asian Markets Rise in Tandem, Taiwan’s Precious Metal ETFs Become Focus

This bullish momentum has also spread to Asian stock markets. The MSCI Asia Pacific Index (excluding Japan) has gained 26% year-to-date, its best performance since 2017; Japan’s Nikkei Index and South Korea’s KOSPI have recorded strong gains of 26% and 72%, respectively.

In Taiwan, gold and silver-related ETFs have become investment focuses. The leveraged Yuanta S&P Gold ETF (00635U) and Yuanta Dacian Silver ETF (00738U) have seen their net asset values and scales soar recently as international gold and silver prices hit new highs. The number of investors has multiplied, reflecting strong local retail demand for precious metals allocation.

Practical Strategies: How to Ride the Wave of Precious Metals

According to institutional analysis, most Taiwanese stock investors still have excessive asset concentration in equities, with insufficient allocation to gold and silver. As the USD weakens and the global rate-cut cycle begins, coupled with unresolved geopolitical risks, gold’s safe-haven value has surpassed traditional bonds. Investors are advised to adopt the following three-tiered approach:

Gradual Entry: Use dollar-cost averaging to invest in gold ETFs, diversifying entry points and participating in the long-term upward trend of gold.

Proportional Allocation: Allocate 5–10% of the overall portfolio to gold-related assets to hedge against market volatility and enhance portfolio stability.

Focus on Silver: Silver combines safe-haven and industrial attributes; demand from emerging industries like AI and green energy will continue to push prices higher, warranting ongoing attention.

Outlook for 2025: Gold Reshaping Asset Allocation Patterns

Gold has evolved from a traditional safe-haven tool to a widely pursued store of value by central banks, institutional investors, and retail investors alike. Technical breakthroughs reaching historic highs, strong fundamental support, and upward revisions of foreign forecasts have established a long-term bullish trend. Taiwanese investors should not only monitor the Taiwan stock market but also consider allocating part of their funds to gold and silver products, enabling participation in international markets while adding a “hedging moat” to their investment portfolios.