In 2025, gold will undoubtedly be one of the most eye-catching assets in the global capital market - based on a 27% increase in 2024, it will continue to rise in 2025, with a year-to-date increase of 43%. The price of gold exceeded US$3,700 per ounce, and discussions about gold's "anti-inflation" and "value preservation and appreciation" have once again become the focus. But can gold really retain its value in all inflationary environments? Under stagflation and deflation, gold behaves completely differently. And even if you look in the right direction, those inconspicuous "fee traps" in transactions may quietly eat up the profits that should belong to you.

1. The truth about gold’s “anti-inflation”: stagflation is the stage, deflation is the cold spot

The underlying buying logic of gold is to preserve its value. But preserving value does not mean “fighting all inflation”—gold’s performance in different macro cycles varies greatly.

Stagflation: Gold’s “highlight moment”

When economic growth declines rapidly and high inflation occurs at the same time, real interest rates will be pushed to low levels, and gold is most flexible at this time. The 1970s are the best historical footnote: after the collapse of the Bretton Woods system in 1971, gold turned to free floating pricing; the first oil crisis in 1973-1974 dragged the economy into "stagflation"; the second oil crisis broke out in 1978, and the United States fell into severe stagflation - the price of gold increased 23 times in this decade.

The logic behind gold's outperformance during stagflation is not complicated: gold is an asset with no cash flows (and even storage costs), so it benefits most from inflation, especially hyperinflation. When cash and interest-earning assets are sold off at the same time, gold becomes a "refuge" for a few.

Deflation period: gold’s “cooling off period”

The ranking of assets in a deflationary environment is completely different: dividend-paying assets (such as high-dividend stocks, bonds) > gold > growth stocks. In an environment of low growth and falling prices, investors pay more attention to near-term and stable cash flows, and gold neither generates interest nor pays dividends, so its attractiveness naturally declines.

Today’s Complexity: Traditional Frameworks Are Failing

However, market performance in 2025 defies the traditional “inflation-deflation” dichotomy. Risky assets (growth stocks) and safe-haven assets (gold) rise together, and deflationary assets (dividend stocks) and inflationary assets (gold) rise together. This does not mean that the traditional framework has completely failed, but because there are other more powerful forces at work: the central bank’s demand for gold purchases due to the fragmentation of the global geopolitical landscape, the rising and falling geopolitical risks, and the long-term trend of restructuring the global monetary system. These factors go beyond simple inflationary logic and have become the main drivers of gold's rise in recent years.

Practical suggestions:

When the signal of stagflation is clear (high inflation + economic downturn): Gold is the focus of allocation, and a moderate increase in holdings may be considered.

When deflation risk dominates (low growth + falling prices): Gold’s safe-haven value is relatively limited, and more attention should be paid to interest-earning assets.

In the current complex environment: the pricing logic of gold is no longer limited to inflation. Structural factors such as central bank gold purchases and de-dollarization are also critical and require comprehensive judgment.

2. The hidden trap of “transaction fees”: If you can’t calculate the details, you won’t make money.

If you look in the right direction, you may lose out on cost. The cost of precious metals trading is far more than just the word "spread" - spreads, overnight fees, and slippage, each of which may become an invisible killer of profits.

Spread: the most intuitive and easily overlooked cost

The spread is the difference between the buying price and the selling price, and is an inevitable cost for each transaction. In 2025, the gold spreads of mainstream international platforms are generally between 0.3-0.5 US dollars/ounce for fixed spreads, approximately 0.15-0.3 US dollars/ounce for floating spreads during Asian time periods, and approximately 0.2-0.8 US dollars/ounces during European and American time periods. Taking trading 1 lot (100 ounces) as an example, a spread of US$0.5/ounce means a cost of US$50.

But the differences between platforms go far beyond that. Some platforms claim "low spreads" but charge an additional trading commission of US$5-10 per lot. There are also platforms with gold spreads as high as 3.8-4.2 US dollars per ounce. For the same transaction of 1 lot of gold, the total cost of different platforms may differ several times.

Overnight fee: the "silent cost" of holding a position overnight

Overnight interest is the interest that needs to be paid or earned when holding a position overnight. The current overnight interest rate of London Gold is approximately -2.5% to -3.5% for long positions (i.e. interest payment), and +0.5% to -1.5% for short positions (interest may be earned). Most platforms charge triple overnight fees on Wednesdays to cover weekend risks.

This means: If you are used to holding positions overnight, overnight fees will significantly drive up transaction costs. Taking 1 standard lot of gold as an example, the overnight cost of some platforms can reach 18-22 US dollars per day. Investors who hold long-term positions must include overnight fees in cost accounting.

Slippage: The “hidden tax” under extreme market conditions

Slippage refers to the deviation between the order execution price and the expected price, which is especially obvious in extreme market conditions. According to industry reports, the cost of slippage under extreme market conditions can reach US$5 per ounce. Slippage is not as intuitively visible as spreads and overnight fees, but it also erodes profits.

How to settle this account?

When comparing platforms, don’t just look at the spread numbers, but comprehensively calculate the total cost of “spreads + commissions + overnight fees + slippage expectations”. A platform with seemingly lower spreads may actually have higher total costs if overnight fees are high or slippages are frequent.

3. About WMAX platform

WMAX is an online trading platform that provides diverse financial products such as precious metals, foreign exchange, stock CFDs, indices, and commodities. The platform supports a leverage ratio of up to 1:500, a minimum deposit threshold of US$2,000, supports EA (intelligent trading system), and the minimum trading lot size is 0.01 lots. In terms of trading types, WMAX covers gold, silver, platinum and other precious metal products.

WMAX focuses on professional research and judgment on the precious metal market, and provides investors with market interpretation and operational strategy reference through multi-dimensional analysis of capital flows, industrial demand, policy dynamics, etc. The platform also has a risk warning system to help investors catch market correction signals.

Features of WMAX in terms of transaction costs:

Judging from public information, WMAX adopts the ECN account model. The advantage of the ECN model is that orders enter the market directly, and there is no differential treatment between retail investors and institutions. Regarding specific spreads and overnight fee standards, it is recommended that investors obtain the latest rate table through the platform's official channels before opening an account, and conduct a comprehensive evaluation based on their own trading habits (position cycle, trading frequency, lot size).

4. Risk warning about leveraged trading

Leveraged trading is the most double-edged sword tool in precious metals investing. Taking 80 times leverage as an example, investors only need to pay a "margin" of 10,000 yuan to lock in a gold position worth 850,000 yuan - but a 1.2% drop in gold prices may lead to forced liquidation and investors lose all their deposits. Leverage magnifies not only profits but also losses. Any leveraged transaction should be based on a full understanding of product rules and an assessment of one's own risk tolerance. Never trade with funds that you cannot afford to lose.

5. Conclusion

Gold's "anti-inflation" property is not omnipotent - it is king during stagflation, but may lose its luster during deflation. Regardless of whether it is bullish or bearish, transaction costs are the key variable that determines the final profit and loss. Spreads, overnight fees, slippage - each of these is worthy of careful consideration by investors before opening an account. In precious metals trading, seeing the cycle clearly and calculating costs may be more important than predicting the gold price itself.