In the previous two reports, we explored in depth why US Treasury yields have continued to climb and why US national debt has surpassed $39 trillion for the first time since World War II. If, after reading those reports, you've started thinking, "Where should I put my money?"—gold is one of the answers that many global investors are already providing through their actions. Here are the reasons, and key information you need to know before deciding whether to include gold in your portfolio. Key Data: Gold's all-time high was $5,589 per ounce on January 28, 2026. Current price is approximately $4,460 to $4,523 per ounce. Year-on-year increase is approximately 35%. Increased by over 230% since 2020. GLD Asset Management exceeds $141 billion. Central banks worldwide are expected to purchase a total of 863 tons of gold by 2025. The People's Bank of China has increased its gold holdings for 18 consecutive months. Section 1 – Recap: Why this report follows the previous two? In our report on rising yields, we showed how the yield on the 30-year US Treasury note rose to 5.2%—the highest level since 2007—and analyzed how rising yields damage stock valuations through four channels. In our report on the US debt crisis, we showed how US national debt surpassed $39 trillion, interest payments exceeded $1 trillion for the first time, and how the Congressional Budget Office characterized the current fiscal trajectory as "unsustainable." The first two reports told you where the problem lay. This report discusses what global investors are buying to address these issues. The logical connection between the three reports is very clear. When a government continues to run huge deficits, issues bonds on a massive scale, and has its credit rating downgraded by the three major rating agencies, two things often happen: First, bond investors demand higher compensation, and yields rise accordingly; second, investors begin to look for assets that the government cannot increase by issuing more bonds, cannot depreciate through inflation, and cannot be confiscated through taxation. Gold has played this role for thousands of years. In 2025 and 2026, its role was more significant than at any other time in modern financial history. Gold was priced at approximately $2,624 per ounce at the beginning of 2025. By January 28, 2026, it had reached an all-time high of $5,589.38. In just twelve months, gold not only set a new record but completely redefined the meaning of "high-priced gold" in the modern market. From May 2025 to early June 2026, the price of gold rose from approximately $3,335 to between $4,460 and $4,523, an increase of about 35%. Since 2020, gold has accumulated a gain of over 230%. This is no coincidence, but a direct response from the market to the forces described in the previous two reports.Educational Note: The "spot price" of gold referred to by investors is the current market price of physical gold for immediate delivery, quoted in US dollars per troy ounce. One troy ounce equals 31.1 grams. When purchasing a gold ETF, its price is highly correlated with the spot price of gold, with only a small annual management fee deducted. When media reports of gold reaching record highs, they are referring to the spot price. Section 2—The Real Drivers of Gold Prices Gold is fundamentally different from almost all other assets. It doesn't pay dividends, doesn't generate profits, and doesn't create cash flow. Holding Nvidia stock yields profits; holding bonds yields interest income; gold, however, simply sits there. So why does it rise? The answer lies in the fact that gold is not essentially an investment in the traditional sense, but rather a form of financial insurance—a store of value that preserves purchasing power when other assets are under pressure. When people's confidence in paper money, government credit, and the financial system declines, the price of gold rises. Understanding this is key to understanding the current price level of gold. The inverse relationship with real interest rates. There is one of the clearest long-term patterns in financial markets regarding gold and real interest rates: gold tends to rise when real interest rates (nominal interest rate minus inflation) are low or negative, and tends to fall when real interest rates are high and positive. When risk-free bonds offer a 5% yield and inflation is 2%, investors receive a 3% real return annually, making gold relatively unattractive. However, when inflation reaches 5% and bonds offer only a 4% yield, the real return on bonds is negative 1%. In this environment, the disadvantage of gold's zero yield no longer applies—holding cash and bonds means a shrinking purchasing power each year, while gold at least retains its value. There is also an inverse relationship with the US dollar. Gold is priced in US dollars, so a weaker dollar directly pushes up the dollar price of gold. When investor confidence in the dollar as a reliable store of value wavers—as seen with the trajectory of US debt and the Moody's downgrade—gold becomes more attractive. The BRICS countries currently hold 17.4% of global gold reserves, up from 11.2% in 2019, a result of deliberately reducing dollar exposure. Finally, there is the demand for safe-haven assets amid geopolitical tensions. For millennia, gold has been a safe-haven asset during times of war, crisis, and political turmoil. The current environment—the closure of the Strait of Hormuz due to the US-Iran conflict, oil prices exceeding $100 per barrel, the ongoing war in Ukraine, the continued US-China trade friction through tariffs, and the accelerating fragmentation of the global geopolitical landscape—provides sustained support for gold demand. When the world is fraught with uncertainty, capital flows to assets without counterparty risk.Gold has no counterparty; it is not a promise from anyone. Central bank gold purchases have become a structural demand driver. This is the most significant new development in the gold market, and information that most retail investors have not yet fully digested. Between 2022 and 2024, central banks worldwide purchased more than 1,000 tons of gold annually—more than double the historical annual average of 400 to 500 tons. In 2025, central bank purchases reached 863 tons, still representing extremely high levels of official sector demand. JPMorgan Chase predicts that combined demand from central banks and investors will average approximately 585 tons per quarter in 2026. Driving this structural shift was a single event: in 2022, Western countries froze approximately $300 billion of Russia's foreign exchange reserves as a sanction measure. This move sent a clear signal to every central bank globally: paper assets held overseas can be frozen overnight, but gold stored in domestic vaults cannot. This lesson has not been forgotten. In 2025, more than 40 central banks achieved net increases in gold holdings. Latest data shows that the People's Bank of China will extend its continuous gold purchase record to 18 months in April 2026, adding 8 tons in a single month—the largest monthly purchase since December 2024—bringing China's official gold reserves to 2,322 tons, accounting for 9% of total reserves. Educational Note: "Real interest rate" is the interest rate you actually receive after deducting inflation. If the 10-year US Treasury yield is 4.6% and inflation is 3.5%, the real interest rate is approximately 1.1%. If inflation rises to 5%, the same 4.6% yield corresponds to a real interest rate of -0.4%. Gold historically performs best when real interest rates are negative or extremely low because in such an environment, holding cash or bonds means that purchasing power shrinks every year, while gold at least maintains its value. Section 3—The Five Current Driving Forces of Gold In 2026, five specific forces are converging simultaneously, jointly supporting gold to remain at historically high levels. Force 1: The Direct Link Between the US Fiscal Crisis and Gold. Every item recorded in our debt crisis report directly maps to the bullish logic of gold. A government with a debt of $39 trillion, increasing by approximately $7.5 billion daily, an annual deficit of about $2 trillion, and interest payments alone reaching $1 trillion annually, faces a substantial long-term risk of currency devaluation. When the fiscal trajectory is deemed unsustainable by the Congressional Budget Office itself, and when all three major credit rating agencies have downgraded the US rating, rational investors will allocate some of their wealth to assets outside the boundaries of government control. Gold is that asset. Force Two: De-dollarization and the erosion of trust in dollar assets. The 2022 freeze on the Russian central bank's reserves marked a paradigm shift in global reserve management.If dollar assets can be frozen for geopolitical reasons, they cease to be purely financial assets and become political tools. Central banks in the Global South, Middle Eastern sovereign wealth funds, and BRICS nations are all responding to this new reality by increasing their gold reserves. China has added over 350 tons to its gold reserves in recent years as part of a clear diversification strategy. This structural shift has fostered a persistent, price-insensitive group of gold buyers, something that simply didn't exist a decade ago. Force Three: US-Iran Conflict and Energy-Driven Inflation. On February 28, 2026, the US and Israel launch a military strike against Iran. The ensuing blockade of the Strait of Hormuz pushes oil prices above $100 per barrel. March 2026 CPI data subsequently shows year-on-year inflation at 3.8%, the highest level since May 2024. Military action, energy supply disruptions, and inflation—this cascade of events perfectly encapsulates the scenario in gold's history of best performance. Energy-driven inflation erodes the real value of fixed-income assets and cash while simultaneously increasing the attractiveness of finite physical assets. Force Four: Record High Investment Demand. In 2025, global gold investment demand through ETFs, bars, and coins surged 84% to 2,175 tons, a record high. The World Gold Council reports that net inflows into ETFs continued into 2026, with investment demand now far exceeding demand from jewelry and industrial manufacturing. The expansion of the demand base as both institutional and retail investors increase their gold allocations supports high prices across various market conditions. Force Five: Uncertainty from the New Federal Reserve Chairman. Kevin Warsh will take over as Federal Reserve Chairman in May 2026, inheriting the most complex inflation situation in years. The market currently prices a 48% probability of an interest rate hike before December 2026, compared to only 14% just a week ago. This environment fuels persistent inflation concerns and keeps gold demand strong. Section Four – Price History: Understanding the Background of Current Price Levels. Gold remained below $1,000 per ounce for most of the 2000s. The 2008-2009 global financial crisis first pushed it above $1,000, as investors flocked to safe-haven assets. The subsequent near-zero interest rate era and quantitative easing policies propelled it to an all-time high of $1,917 in 2011, before falling sharply after real interest rates rebounded between 2012 and 2015. The next major breakthrough occurred during the COVID-19 pandemic in 2020, when gold broke through $2,074 per ounce for the first time, driven by zero interest rates, unprecedented monetary expansion, and economic uncertainty.A structural shift in central bank behavior in 2022—triggered by the freezing of Russian reserves—began to build a new demand floor for gold. Starting at around $2,624 in 2025, gold broke through $3,500 in the spring and surpassed $4,000 for the first time in October. It broke through $5,000 in the last week of January 2026, subsequently reaching an all-time high of $5,589.38 on January 28 amid escalating tensions between the US and Iran. Since then, gold has undergone a correction of approximately 16% to 20%, trading in a range of approximately $4,460 to $4,523 as of early June 2026. Institutional forecasts remain generally bullish. JPMorgan Chase predicts gold will move towards $5,000 per ounce in the fourth quarter of 2026, with a potential long-term challenge of $6,000. Goldman Sachs set a year-end target price of $5,400. UBS Private Wealth reiterated its target price of $6,000. A Reuters survey of 30 analysts yielded a median forecast of $4,746—closely to the current gold price—representing the baseline scenario consensus. More optimistic institutional targets reflect assumptions of continued pressure on energy prices from the Strait of Hormuz blockade and persistent, stubborn inflation. Educational Note: Even in long-term bull markets, gold experiences corrections—temporary price drops. The current pullback of approximately 16% to 20% from the January peak is normal in commodity markets and does not necessarily signify the end of the trend. During the 2001-2011 gold bull market, there were several corrections of 15% to 20% before prices continued to rise. What truly determines the long-term direction is whether the underlying demand drivers—central bank gold purchases, fiscal concerns, real interest rates, and geopolitical risks—remain valid. Section 5—How US Stock Investors Can Obtain Gold Exposure For investors investing through the US market, there are three main ways to obtain gold exposure, each differing in cost, convenience, security, and risk characteristics. Physical gold – The most direct way to hold gold is by purchasing physical gold bars or coins from reputable dealers or gold custody services. This gives you true ownership and eliminates counterparty risk – the gold belongs to you, and no institution can freeze or devalue it through policy decisions. In the United States, physical gold can be purchased through well-known dealers such as APMEX, JM Bullion, and SD Bullion, typically at the spot price plus a small premium. For investors who do not wish to store their gold at home, professional vault services such as Brink's, Loomis, and the Royal Canadian Mint's custody programs offer secure storage options – your gold is stored separately and insured, not mixed with other people's holdings, and is fully traceable. The downside of physical gold is its liquidity and cost.Storage and insurance require ongoing expenses, and selling necessitates finding a buyer or returning to a dealer, who typically purchases the gold at a slightly lower price than the spot price. These trade-offs are acceptable for investors who view gold as a long-term store of value and don't require frequent trading. ETFs are more practical for investors who need a quick, low-cost exit from their positions. Gold ETFs – the most convenient entry point for most investors. Gold ETFs are traded on exchanges like stocks, with prices highly correlated to the spot price of gold. They can be bought and sold in seconds through any standard brokerage account, with no storage or insurance costs other than annual management fees. Here are some key options for US investors: SPDR Gold Trust (GLD). The world's largest gold ETF, with over $141.7 billion in assets under management as of June 2026. Its sole asset is physical gold held in vaults at JPMorgan Chase and HSBC. Its massive size provides exceptional liquidity, a deep options chain, and extremely narrow bid-ask spreads, making it a preferred choice for frequent traders and large institutional positions. Management fee: 0.40%. iShares Gold Trust (IAU). Structurally almost identical to GLD, but with a lower management fee of only 0.25% and over $80 billion in assets under management. For long-term investors, the lower annual fee has a considerable compounding effect over time. IAU's gold is stored in JPMorgan Chase's vaults in the US and London, meeting LBMA standards. For most retail investors who don't need the ultra-high liquidity of GLD for handling large transactions, IAU is a more cost-effective option. iShares Gold Micro Trust (IAUM). The lowest-fee physically backed gold ETF option, with a management fee of only 0.09%, designed for small investments and regular fixed-amount purchases, suitable for investors who want to gradually build a position over the long term. Aberdeen Standard Physical Gold ETF (SGOL). Gold is stored in Swiss vaults, providing an option for geographical diversification outside the US and UK storage locations used by GLD and IAU. Management fee: 0.17%, ideal for investors who particularly want to store their gold outside the US financial system. Educational Note: The ETF's "management fee" is an annual fee charged as a percentage of the investment amount. For a gold ETF with a management fee of 0.25%, $25 is paid annually for every $10,000 invested. This fee is automatically deducted from the fund and reflected in the ETF price. For a $50,000 investment, the difference between a 0.40% and a 0.09% management fee rate accumulates to approximately $1,550 over ten years. For long-term holders, the impact of the management fee rate is more significant than it initially appears.For investors seeking leveraged exposure to gold prices, gold mining stocks and ETFs offer a significantly different risk-return profile compared to physical gold. When gold prices rise, mining companies' profits often increase faster than the price of gold itself because their operating costs are relatively fixed—a gold mining company with total costs of $1,500 per ounce will actually see its profit margin more than double when gold rises from $2,500 to $5,000, even if the price of gold itself "only" doubles. The VanEck Gold Mining ETF (GDX) is the largest and most liquid gold mining ETF, holding shares in over 50 major gold mining companies with approximately $33 billion in assets under management. Major holdings include Newmont, Barrick Gold, Aegis Mining, and Franco Nevada. GDX is a standard choice for investors seeking diversified exposure to the gold mining sector. The VanEck Junior Gold Mining ETF (GDXJ) covers smaller, mid-sized mining companies with greater potential for growth, but also carries higher risk. In a strong gold bull market, junior mining companies often significantly outperform the GDX, but they also tend to experience deeper declines during corrections. To illustrate this leverage effect, gold mining stocks are projected to return approximately 45% in 2025, significantly outperforming physical gold ETFs like GLD and IAU by about 25%. However, mining stocks also carry risks not present in physical gold – operational accidents, cost overruns, political risks in mining jurisdictions, and management uncertainty. Even in a rising gold price environment, a mining company can still incur losses if its production costs rise faster than the price of gold. Section 6 – Understanding Risks: What Headwinds May Gold Face? Gold's extraordinary rally is built on a solid macroeconomic foundation. But investors buying gold today need to understand the potential risks as clearly as they understand tailwinds. A significant positive real interest rate. High real interest rates are gold's most reliable enemy. If the combination of rising interest rates and falling inflation creates a truly positive real return environment – for example, a 10-year Treasury yield of 6% and inflation of only 2% – the opportunity cost of holding gold will increase significantly. Investors will then be able to obtain a 4% annual real return from risk-free bonds, making gold's zero-yield disadvantage a tangible reality. When the Fed raised interest rates rapidly in 2022, gold saw a significant correction relative to its 2020 peak. Any combination of genuine improvement in US inflation and central bank tightening monetary policy poses the most direct threat to the bullish logic of gold. A stronger dollar. Since gold is priced in dollars, a stronger dollar provides direct resistance to gold.GBI Direct points out that the three near-term headwinds for gold in May 2026 are: a rebounding US dollar, some progress in the US-Iran ceasefire negotiations, and technical selling after the January highs. If the US resolves its fiscal problems in a more credible way than expected, attracting funds back to the dollar for safety, gold will face price pressure from the dollar exchange rate. Easing geopolitical risks. Trading Economics notes that gold fell below $4,500 in early June, partly due to the stalemate in US-Iran peace talks, while Trump indicated a memorandum of understanding to reopen the Strait of Hormuz could be reached as early as next week. Any genuine de-escalation of the Middle East conflict will simultaneously eliminate the energy premium, inflation premium, and geopolitical risk premium included in the current gold price. Selling under acute financial market stress. In acute financial crises—unlike the gradual fiscal concerns currently supporting gold—investors sometimes sell gold to meet margin calls or raise cash. During the initial shock of the COVID-19 pandemic in March 2020, gold fell sharply for several weeks before rebounding strongly and reaching new highs. In a genuine financial panic, the correlation between gold and other risky assets may temporarily rise, although its fundamental function as a safe-haven asset remains intact. Valuation and mean reversion: The current gold price of around $4,490 is still about 70% higher than it was 18 months ago. Even with strong fundamental support, assets that have risen so much historically tend to undergo a long period of consolidation or correction before the next upward move. Investors buying today are not entering at the beginning of a rally, but rather in the middle of a significant bull market, which affects the probability distribution of recent outcomes. Educational note: In investing, "opportunity cost" refers to the price paid for forgoing one investment in exchange for another. Holding gold, which does not generate any returns, instead of a 4.6% yield on 10-year US Treasury bonds means an opportunity cost of 4.6% per year. Gold can only "outperform" bonds in a long-term holding context if its price appreciation consistently exceeds this yield—or if you believe that the Treasury yield is insufficient to compensate for the risk of holding dollar assets. This is the core trade-off that every gold investor implicitly bears. Section 7 – How to View Gold in an Investment Portfolio Gold is best understood as portfolio insurance rather than a growth investment. Its value lies in preserving purchasing power and reducing portfolio volatility when other assets are under pressure. Most financial advisors who include gold in their portfolios typically recommend an allocation of 5% to 10% for most investors.The logic supporting a certain level of gold exposure at the current juncture is precisely the concern documented in the previous two reports. If, after reading those reports, you conclude that the US fiscal trajectory poses a real long-term risk to the dollar's purchasing power, that rising yields are a structural shift rather than temporary volatility, and that geopolitical fragmentation is creating ongoing uncertainty in global financial markets—then a moderate allocation to gold is a natural extension of this judgment. The arguments against over-concentration in gold holdings are equally clear. Gold does not generate any returns during its holding period. In a positive economic scenario where inflation is under control, fiscal problems are properly addressed, and real interest rates normalize at a moderately positive level, gold may significantly underperform bonds and stocks over a multi-year timeframe. The same macroeconomic forces make gold attractive in 2026, but these forces could reverse if fiscal policy improves or the geopolitical environment stabilizes. Investor Allocation Framework: Investors seeking the simplest and most cost-effective long-term gold exposure will find IAU or IAUM the most attractive entry points—IAU offers the advantages of low cost, high liquidity, and large-scale funds, while IAUM serves long-term holders solely focused on minimizing expenses with the lowest management fees. Investors seeking true ownership, independence from any financial institution, and no counterparty risk will choose to purchase physical gold through reputable dealers and vault services, accepting trade-offs in storage and liquidity as the price of true independence from the financial system. Investors seeking leveraged exposure to gold price increases and able to tolerate company-level risk will study GDX (diversified mining exposure) or GDXJ (more flexible small and medium-sized mining exposure), understanding that mining stocks often fall more sharply than physical gold during corrections, but also tend to outperform physical gold in bull markets. Section 8—Key Developments Worth Monitoring: US Real Interest Rate Trends. The single most important variable in judging the direction of gold prices is whether real interest rates rise substantially. It is necessary to simultaneously track the 10-year Treasury yield and monthly CPI data. If yields rise while inflation falls, and real interest rates turn positive, gold will face resistance; if inflation remains stubborn while yields are constrained by fiscal concerns, and real interest rates remain low, gold will still have support. The US-Iran negotiations and the situation in the Strait of Hormuz are also factors. Trump stated that a memorandum of understanding to reopen the Strait of Hormuz could be reached as early as the week of June 9th. If both sides truly reach an agreement to reopen the strait, it will simultaneously lower energy prices, alleviate inflationary pressures, and eliminate the geopolitical premium for gold. This is the most noteworthy catalyst for a decline in gold prices in the near term. Central bank gold purchase data is also a factor.The World Gold Council releases demand data quarterly. The People's Bank of China increased its holdings by 8 tons in April 2026, the largest monthly purchase since December 2024. If this pace of purchases continues, it will maintain the structural demand floor that has supported gold since 2022. Warsh will chair the first FOMC meeting on June 16-17. Any signals from Warsh regarding inflation tolerance or a tightening monetary policy stance will influence gold's price movement. A more hawkish stance implies potential rate hikes, which is unfavorable for gold; a more accommodative stance is favorable. Key price levels are $4,500 and $5,000. A sustained hold above $5,000 would signal a restart of the main upward trend and could attract more momentum buying. A sustained drop below $4,200 to $4,300 suggests a deeper correction than expected, potentially triggering a reassessment of recent arguments. The forces that propelled gold from $2,624 to $5,589—fiscal deterioration, concerns about a depreciating dollar, central bank de-dollarization, geopolitical risks, and negative real interest rates—have not disappeared. These forces have not weakened but rather intensified after the US debt milestone documented in the previous report. Whether gold's next move is towards $5,000 and higher, or a longer period of consolidation at current levels, the structural logic of holding some gold exposure in a diversified portfolio is supported by macroeconomic fundamentals—a rare occurrence in modern financial history. BIT (formerly Matrixport) offers direct connections to licensed brokers for its US stock business, covering all US main board stocks and ETFs. Leveraging over seven years of institutional service experience and compliance licenses, BIT has successfully bridged the gap between digital assets and traditional finance, helping investors quickly capture investment opportunities.Data Sources: CBS News, "Highest Gold Price in History," February 2026; APMEX, Gold Price Today and Historical Records, June 2026; Yahoo Finance, Gold Forecast and Tracking for 2026, May 2026; World Gold Council, Gold Demand Trends for Q1 2026, April 2026; JPMorgan Global Research, Gold Price Forecast for 2026 and Beyond, 2026; GBI Direct, "Gold Price Forecast for 2026: Data in Action," April 2026; GoldSilver, "Gold Price Outlook for May 2026," May 2026; Fortune Magazine, Gold Price Today, June 1, 2026, June 2026; USAGOLD, Daily Gold Price History, June 2, 2026, June 2026; JM Bullion, Gold Price Today, June 2, 2026, June 2026; Trading Economics, June 3, 2026 Gold Price Today, June 2026; Visual Capitalist, "Rankings of Central Bank Gold Purchases and Deposits in 2026", April 2026; Discovery Alert, "Central Bank Gold Purchases and Reserve Management in 2026", April 2026; Online Gold, "Central Banks Added Over 1,200 Tons of Gold in 2025", February 2026; Isabullion, "How Central Bank Gold Purchases Affect Gold Prices in 2026", May 2026; Allianz Investment Research Center, "Gold Beyond Records: Central Bank and Market Trends in 2025", October 2025; Investing News Network, "Gold's All-Time High Price", February 2026; Vantage Markets, "Best Gold ETFs of 2026", April 2026; The Motley Fool, "Best Gold ETFs and Investment Guide for 2026", June 2026; MEXC, "Gold Prices Hit Record High of $5,500, Investment Demand Surges 84%", January 2026. Data as of June 3, 2026. [BIT]