The internal divisions within the Federal Reserve have intensified, with three members supporting an interest rate hike. The probability of raising interest rates in September has exceeded 60%. Gold has plummeted 22% from its high point at the beginning of the year, marking its worst quarter since 2013. The geopolitical conflict in the Middle East has produced a reverse hedging effect, and the diversion of funds from the US dollar has suppressed precious metals. CD Markets believes that the interest rate cut cycle in 2027 is expected. Global de-dollarization and debt risks support the long-term allocation value of gold, and short-term corrections will open a layout window.

Although the Fort Knox gold account is complete, it has been decoupled from the US dollar, and the market's trust in the legal currency system has increased. The petrodollar system is loosening, global de-dollarization is accelerating, and the proportion of U.S. dollar reserves has dropped to 57%, a 25-year low. Short-term interest rates suppress gold prices, and the weakening of long-term U.S. dollar credit supports the revaluation of gold as an asset without sovereign credit risk.

Global central banks sold $82 billion in US Treasuries, a 14-year low, accelerating the de-dollarization trend. The market has over-priced inflation shocks and overlooked growth recession risks, making 2-5 year US Treasuries attractive for investment. It is recommended to allocate to short-to-medium term US Treasuries, with attention to shipping in the Strait of Hormuz, US non-farm payroll data, and signals of a Federal Reserve policy shift.