In fact, when you say “Hot Topic”, 4-5 topics come to mind in the current conjuncture. You are right; we are going through such a time that there are multiple topics, each of which will affect global trade, the course of the economy and investment perception.

However, the topic I would like to briefly mention is gold. It started the week with a new record on Monday. However, there was no development that we do not know from Friday to Monday. Some know, some do not. With your permission, let me remind you once again what is in gold that they are buying so much, then I will try to explain whether there is an overbuy or if we are just starting.

First of all, gold is not the only asset that started the week with a record. Since the dollar index, which also played a role in its rise, made a temporary bottom at the “interim low”, gold must have been fed up with Monday morning from there. But this is not just a situation that explains the price reaction and cause and effect relationship. Let's look at the reasons.

First of all, of course, Trump’s domestic and foreign policies include risks in almost every subject – international relations, trade, diplomacy, determining country borders, the Powell and Fed issue. The bad news is that none of these risks seem to be coming to an end. Another difficulty is that, although money that normally avoids risk has entered US bonds, this time the problem is related to the Fed and the head of the Fed, so the market probably does not trust the American economic authority and does not lean on bonds.

In this case, American assets in particular are a bit too heavy in terms of risk and there is a serious flight from that side to the other sides. At this point, please remember; from a strong long-term investor like Warren Buffet to the CEO of one of the world’s most important banks like Jamie Dimon, the people who are expected to read this business best have liquidated their stock positions and switched to cash in recent months.

Is it a coincidence? If you say “it could be”, I would say that you are a very naive person. The escape from US assets is not only about selling stocks, of course, there is also an exit from the Dollar, which we see in the Dollar Index. In other words, the doors of escape to quality that used to be knocked on are no longer knocked.

I don't talk much about the gold purchases of central banks anymore, but it should be remembered that the transactions of the Central Banks are usually one-way, the buyer does not easily lose his property again. Therefore, full support for the rally, full support. For now, it seems like there is a long way to go for interest rate cuts. And when that issue comes up, it is not out of the question for more money to flow into gold. On top of that, when the institution reports that fuel the market and raise targets come, it is necessary not to stand in front of the tsunami.

The investment world, which is affected by all these, is of course taking a breath. It is not possible to objectively measure the demand for physical gold or the FX positions opened in the over-the-counter market and carried for a long time and present an argument. But I can clearly see the money flow in ETFs.

I have to say this much, in these weeks when gold is breaking record after record, the total USD value of ETFs is still 23 percent below the peak level of 2020. In other words, it is too early to talk about reaching saturation. Actually, I look at gold like this; remember when Trump was first elected, oil company stocks were considered as “Trump Trade”? I think the real Trump Trade is gold right now.

Because every job he did, every decision he signed, every statement he made strengthened the risk factors, and he could not conclude almost anything he said. He only extended the time that could cause the markets to have a relief rally, but they did not cause a relief rally either. However, every issue I mentioned above brought buying to gold. As long as Trump continues like this, gold will continue!

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.