To The Moon

Analysis of recent key events shows a complex interplay of factors driving the markets. Frequent geopolitical risks are supporting a rebound in gold prices. Since the beginning of 2026, geopolitical conflicts have garnered widespread international attention. On January 3rd, the U.S. military unexpectedly launched a military strike on Venezuela, bombing targets including its military airports, the Ministry of Defense, and ports, subsequently capturing President Maduro and his wife and transporting them to New York State, with the U.S. Department of Justice later unveiling an indictment against the couple. The core intention behind the U.S. military action against Venezuela is to gain control over its resources. President Trump declared that he would facilitate the entry of major U.S. oil companies into Venezuela to invest in repairing oil infrastructure, stating that the U.S. would continue its involvement in Venezuelan affairs until a so-called "safe and proper transfer of power" is completed; the U.S. Vice President openly admitted that oil was a significant motivator for the military action; the U.S. Energy Secretary explicitly stated plans to maintain control over Venezuela's oil industry, intending to oversee the country's oil exports "indefinitely." Currently, several nations have pointed out that the U.S. military strike on Venezuela violates international law, calling for the immediate release of the Venezuelan president and urging the resolution of differences through dialogue and negotiation. However, the Trump administration maintains a hardline stance towards Latin America, persisting with territorial and resource-related claims on Denmark's Greenland, actions that have sparked broad concern in international markets. This not only provides support for precious metal prices but is also driving up prices for bulk commodities. Multiple Fed participants supported the interest rate cut implemented last December. The minutes from the Federal Reserve's December 2025 monetary policy meeting revealed that "most" participants supported implementing a rate cut that month, while a minority argued for keeping policy unchanged. Most officials anticipated that U.S. economic growth would pick up pace in 2026; against a backdrop of slowing employment growth in 2025, shifting to a more neutral policy stance would help prevent a significant deterioration in the labor market. Should the disinflation trend align with expectations, there remains room for further rate cuts in the future. Nevertheless, influenced by inflation persisting longer than anticipated, the Fed maintains a cautious attitude regarding potential rate cuts in early 2026. Federal Reserve voting member and Minneapolis Fed President Kashkari indicated that the current policy stance is nearing neutral, and the Fed needs to rely on more economic data to determine the priority between addressing inflation and labor market conditions before flexibly adjusting policy direction accordingly. Fed Governor Milan, however, believes that cumulative rate cuts exceeding 100 basis points will be necessary in 2026. Market expectations for Federal Reserve monetary easing continue to underpin precious metal prices. Global gold investment scale continues to expand. A World Gold Council report indicates that global gold ETF (Exchange Traded Fund) inflows hit a new annual record high in 2025, with the North American market leading the performance. In 2025, the total assets under management for gold ETFs more than doubled, and holdings surged significantly, with both metrics setting new historical records. The average daily trading volume in the gold market reached $361 billion, also achieving a record high. Furthermore, data released by the People's Bank of China on January 7th shows that as of the end of December 2025, China's gold reserves stood at 74.15 million ounces (approximately 2,306.323 tons), an increase of 30,000 ounces (about 0.93 tons) from the previous month, marking the 14th consecutive month of gold accumulation. Analysis of subsequent market impact and key points. Supported by multiple factors including supply constraints, robust industrial demand, and expectations for U.S. monetary easing, the international spot silver price once broke through the $80 per ounce mark, reaching a high of $83.9/oz. Gold and platinum prices also touched historical highs, while palladium and other non-ferrous metal prices showed significant increases. Throughout 2025, the cumulative increase in the silver price reached 181%, far exceeding gold's 64% gain, with the gold price repeatedly刷新ing historical records. The rise in precious metal prices benefits from the resonance of multiple factors, including market expectations for Fed rate cuts and further easing, escalating geopolitical tensions, strong central bank demand for gold as nations seek to reduce dollar dependency, and increased holdings in exchange-traded funds. Currently, prices for precious and non-ferrous metals continue their upward trend, with strong market sentiment and high premiums for over-the-counter silver investments. Recent frequent risk control measures, such as margin hikes by domestic and international exchanges, necessitate continuous monitoring of changes in market investment fervor, prudent fund management, and guarding against risks associated with sharp price fluctuations. Summary of investment bank and institutional views. UBS: Gold price target of $5,000 per ounce. A recent UBS report indicates an upward revision of its gold price forecast for the first three quarters of 2026 to $5,000 per ounce. Should political or economic turmoil related to the U.S. midterm elections intensify, the gold price could potentially climb to $5,400 per ounce. Additionally, UBS commodity strategists anticipate that by the end of 2026, the gold price will retreat to $4,800 per ounce, an upward revision of $500 from the previous forecast of $4,300. UBS believes that, supported by factors such as low real yields, persistent global economic concerns, and U.S. domestic policy uncertainties (particularly those related to the midterm elections and rising fiscal pressures), global gold demand will experience steady growth in 2026.