Analysis Standards for the Market

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#黄金白银再创新高 Why are US stocks and gold performing strongly?
The key issue: funds have not disappeared, only reallocated.
1. Why can gold break through $5000?
The rise in gold is fundamentally driven by safe-haven demand. When investors feel risks are too high, they do two things: sell high-risk assets (such as cryptocurrencies, tech stocks) and buy low-risk assets (such as gold, government bonds). In the past two weeks, three main factors have driven gold's rise:
Geopolitical tensions: Greenland incident + tariff threats, causing global investor unease
De-dollarization trend: Central banks, including China's, continue to increase gold reserves (14th consecutive month of accumulation)
Currency devaluation concerns: Investors worry about US fiscal pressure and the long-term decline in the dollar's purchasing power
So you see, gold's rise is not because it is inherently better, but because other assets look worse. It's like a group of people trapped in a burning building—they don't consider which room is more beautifully decorated, but desperately run toward the nearest exit. Gold is that "exit."
2. Why can US stocks perform strongly? (Especially small-cap stocks) This might be the most counterintuitive part: while cryptocurrencies plummet, US stocks surprisingly still rise. But a careful analysis reveals a clear logic:
First, style rotation
Since the beginning of 2026, the US stock market has shown a clear trend: funds are shifting from tech giants to small-cap stocks. The small-cap index has gained about 5.57% - 6% since the start of the year, while large-cap stocks (the seven tech giants) have only increased by 0.56%. The tech sector has performed poorly (down about 0.4%) so far this year. Why does this rotation happen?
Because investors are starting to worry: Are tech stocks (especially AI-related) valuations too high? Will there be surprises during earnings season? Small-cap stocks are often more sensitive to economic recovery and have more reasonable valuations.
Second, earnings season expectations
In late January, the peak of US earnings season arrives. Microsoft, Meta, Tesla, Apple, and other giants will release their results. The market is waiting: can these companies' earnings support current valuations? If earnings beat expectations, stock prices may continue to rise; if not, they may retreat. Therefore, before earnings are announced, funds tend to be cautious and prefer to flow into more reasonably valued small-cap stocks.
Third, economic recovery expectations
Although geopolitical tensions persist, the US economy's fundamentals have not collapsed. The employment market remains robust, and consumer spending has not declined significantly. This indicates that the risk of recession is not as high as the market imagines. Once geopolitical tensions ease, market sentiment could quickly recover.
3. What is the logic behind fund flows?
After understanding the rise of gold and US stocks, let's look at the overall flow of funds:
Step 1: Safe-haven demand Geopolitical tensions → investor panic → sell high-risk assets (cryptocurrencies, tech stocks) → buy safe-haven assets (gold, government bonds)
Step 2: Style rotation Tech stocks are overvalued → earnings season uncertainty → funds flow from small-cap to large-cap stocks → small-cap stocks perform strongly
Step 3: Waiting for catalysts The market is waiting for two key signals: easing geopolitical tensions and the Federal Reserve clarifying the rate cut path. Once these signals appear, funds may reflow into risk assets.
4. Why did cryptocurrencies suffer the worst decline?
It is evident that cryptocurrencies fell the hardest because they hit three major pitfalls:
Highest risk attribute: leading the safe-haven wave
Institutional fund withdrawals: large ETF outflows
Leverage liquidations: magnifying the decline
This is like a storm—cryptocurrencies are more volatile among risk assets.