In September 2026, Lijian SUN, Director of the Financial Research Center of the Fudan Development Institute and Professor at the School of Economics, Fudan University, published a column in 21st Century Business Herald interpreting the deep shift in global asset pricing logic behind the counterintuitive strength of gold prices after the Federal Reserve’s rate hikes. SUN noted that after the Fed raised rates to 3.75%–4.00%, gold prices did not come under sustained pressure as traditional logic would suggest, but instead fell first and then rose. The core background of this anomaly is a fundamental change in the US financing structure: US federal debt has exceeded USD 40 trillion, legacy low-interest Treasuries are entering a rollover period, and continuous fiscal drain on the market, combined with peak capital expenditure in AI, chips and other fields pushing up long-term funding demand, has jointly driven up long-term US Treasury yields. The signal behind this is that the market is repricing US fiscal credit: global assets are moving from a single “interest-rate pricing” regime into a dual “interest rate + credit” pricing regime. The traditional mechanism by which real interest rates suppress gold prices still works, but it is no longer the only pricing logic. Continued gold purchases by central banks around the world and large inflows into gold ETFs show that this rally in gold prices is not simply a bet on rate cuts, but allocation-driven capital increasing exposure to assets that do not depend on any single sovereign balance sheet. Gold’s pricing factors have expanded from the traditional real interest rates, the US dollar and inflation expectations to new dimensions such as fiscal credit, geopolitical risk and reserve diversification—hence the special phenomenon of US Treasury yields and gold prices rising together. This change means that the underlying rules of global asset allocation are being restructured: gold is no longer merely an inflation-hedging asset, but is beginning to assume an insurance function for sovereign credit and the monetary system.

Translated by FDDI

Full text in Chinese available at:

https://fddi.fudan.edu.cn/18/0f/c18965a792591/page.htm