【Hotspot Tracking】The Great Recession May Return $4500 Is Just the Starting Point

Before global markets opened, major foreign media outlets began running headline articles focusing on gold and silver. Among them, The Wall Street Journal summarized that gold has experienced three historic bull runs. The first two, however, ended with heavy losses from investors being trapped at high prices. Whether the current third rally will repeat the previous trends remains to be seen, and investors need to observe patiently. As gold prices become a new narrative in the media, the market has entered a new phase.

Two Major Gold Rallies in History

The first rally occurred from 1978 to 1980. Gold rose from $244 to $850, representing a massive increase of 248%. The international context at that time was the U.S.-Soviet rivalry, with the U.S. in a defensive position. Domestically, the U.S. faced numerous problems: large-scale anti-war protests led to social division, the job market was depressed, the economy suffered from high inflation, and the U.S. dollar depreciated. Politically, there were concerns that the Federal Reserve was being controlled by the Nixon administration.

The second rally took place from 2008 to 2011. Gold climbed from approximately $700 to $1,905, marking a significant increase of 171%. During this period, countries worldwide were primarily responding to the global financial crisis. Under the Federal Reserve's sustained quantitative easing policy, the continuous depreciation of the U.S. dollar triggered fears of a collapse. Driven by market risk-aversion sentiment, gold surged to a historic high of $1,900.

On the Brink of Economic Recession: A New-Phase Rally

Recently, multiple financial institutions have issued warnings about the U.S. economic situation. Moody's latest report states that nearly half of U.S. states (more than 22) have fallen into economic recession and contraction. JPMorgan Chase suggests that government spending, inflation, and the current administration's tariff policies may trigger a U.S. economic recession as early as 2026.

Moody's research further reveals that Washington, D.C., is the region most severely affected by the recession. This is because the U.S. federal government has implemented large-scale layoffs and funding cuts this year, and the impact of government "shutdowns" has exacerbated the region's economic woes. More worryingly, the recession is not confined to a specific area but is spreading from the East Coast to the West Coast, covering almost the entire United States.

Over the past few years, the main theme of the market has remained global geopolitical instability and the "de-dollarization" trend among countries, which has triggered a new round of crisis of confidence in the U.S. dollar. Since the Russia-Ukraine conflict in 2022, Western countries (led by the U.S.) have imposed the harshest sanctions in history—seizing Russia's overseas assets and removing Russia from the SWIFT banking system. This has sparked panic among major countries worldwide, prompting them to build

Independent banking systems and continuously accumulate gold, leading to a surge in gold demand. Combined with the U.S. economic predicament in the past two years, gold still has momentum for growth.

Mai Dong, an Investment Strategist at Zhisheng Research(exclusively invited by Plotio), believes that gold has already started a new round of sharp rises even before the U.S. economy truly enters a recession. According to recent news, U.S. regional banks have collapsed, the Federal Reserve's interest rate cut cycle is imminent, and negative factors for the U.S. dollar are emerging one after another. There is still room for gold prices to rise in the future. It is still possible for gold to break through $4,500 and continue to climb within the next three months.

[Important Disclaimer:The above content and views are provided by Zhisheng, a third-party cooperative platform, for reference only and do not constitute any investment advice. Investors who trade based on this information shall bear their own risks.]
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