According to the Zhitong Finance APP, Zheshang Securities has released a research report stating that U.S. Treasuries and gold are the targets for global investors during turbulent times. However, the liquidity crisis in U.S. Treasuries has caused the safe-haven properties of U.S. Treasuries to be lost in the short term, leaving gold as the only financial asset with safe-haven properties in the short term. When there is a liquidity crisis in U.S. Treasuries, the safe-haven value of gold surges, which is one of the main reasons for the recent significant rise in gold prices. According to the latest data from Fedwatch, the probability of a rate cut at the May meeting is nearly 30%, and the probability of a rate cut at the June meeting is 87.5%. The Treasury futures market has fully priced in the Fed's rate cuts. As a typical zero-yield asset, the opening of rate cut space helps to push gold prices higher.
<h2>The main points from Zheshang Securities are as follows:</h2>
Gold: The safe-haven value of U.S. Treasuries is missing, and the value of gold surges
The only remaining safe-haven asset is gold: U.S. Treasuries and gold are the targets for global investors during turbulent times, but the liquidity crisis in U.S. Treasuries has caused the safe-haven properties of U.S. Treasuries to be lost in the short term, leaving gold as the only financial asset with safe-haven properties. When there is a liquidity crisis in U.S. Treasuries, the safe-haven value of gold surges, which is one of the main reasons for the recent significant rise in gold prices.
Liquidity crisis in U.S. Treasuries: The tariff turmoil has led to a rapid rise in U.S. Treasury yields, with the 30-year Treasury yield reaching 4.9% on April 11, up 50 basis points from April 1. Rising bond yields represent a continuous decline in bond prices, putting related holders at risk of losses. At the same time, weak demand for U.S. Treasury auctions and the closing of basis trades have caused U.S. Treasuries to lose their safe-haven properties in the short term. Additionally, the situation of U.S. Treasury auctions is not optimistic, indicating a further decline in market trust in U.S. Treasuries.
The main highlight of last week's earlier three-year and ten-year U.S. Treasury auctions was a sharp reduction in the allocation ratio for direct bidders. The allocation ratio for direct bidders, which serves as an indicator of domestic demand in the U.S., includes hedge funds, pension funds, mutual funds, insurance companies, banks, government agencies, and individuals.
Last Thursday local time, the U.S. Treasury auctioned $22 billion in 30-year Treasuries, with a winning yield of 4.813%, a sharp rise in the winning rate. Although the winning yield was relatively high, it was 2.6 basis points lower than the pre-issue rate of 4.839%. This is the third-largest deviation in history where the winning yield is lower than the pre-issue rate, and the largest deviation since November 2022. This indicates that there is a significant divergence in the auction market regarding different maturities and the primary and secondary U.S. Treasury markets, with U.S. Treasuries lacking safe-haven properties. Zheshang Securities believes that the auction indicators falling short of expectations show that the market's perception of the liquidity and safe-haven properties of U.S. Treasuries has gradually weakened, and gold should take over the baton, gaining a full premium on its safe-haven properties.
Seasonally adjusted CPI unexpectedly turns negative, opening up space for Fed rate cuts
The seasonally adjusted CPI in the U.S. unexpectedly turned negative in March, at -0.1% (market expectation was 0.1%). The current obstacle to the Fed's rate cuts is U.S. inflation, which is now clearly declining, reopening the space for Fed rate cuts. According to the latest data from Fedwatch, the probability of a rate cut at the May meeting is nearly 30%, and the probability of a rate cut at the June meeting is 87.5%. The Treasury futures market has fully priced in the Fed's rate cuts. As a typical zero-yield asset, the opening of rate cut space helps to push gold prices higher
China's Central Bank Continues Gold Purchases, Boosting Gold Price Center
In March 2025, China's central bank continued to increase its gold reserves, adding 90,000 ounces of gold compared to February. Data on the central bank's gold reserves shows that the central bank continues to purchase gold to supplement its foreign exchange reserves. In Q4 2024, global central banks net bought 333 tons of gold, with a total net purchase of 1,045 tons for the entire year of 2024, while global gold production in 2024 was 3,300 tons, meaning central bank purchases accounted for one-third of global production. The growing demand from central banks is continuously driving up gold prices.
Recommended Targets
Against the backdrop of continuously rising gold prices, gold stocks have investment value and room for catch-up. It is recommended to focus on companies with a high proportion of profits from precious metals business and good growth potential in future gold production. Gold: Chifeng Jilong Gold Mining (600988.SH), Zhaojin Mining Industry (01818), Shandong Gold International (000975.SZ), etc. Silver: Shengda Resources (000603.SZ).
Risk Warning
Federal Reserve interest rate cuts may be less than expected, and the quantity of gold purchases by the central bank may be less than expected

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Zheshang Securities released a research report stating that due to the liquidity crisis of U.S. Treasury bonds, the safe-haven value of gold has significantly increased, becoming the main reason for the recent sharp rise in gold prices. The safe-haven attribute of U.S. Treasury bonds has been lost, leaving only gold as a safe-haven asset in the short term. With the increasing expectations of interest rate cuts by the Federal Reserve, the price of gold as a zero-yield asset is expected to continue to rise

- Zhejiang Securities reports that U.S. Treasury bonds and gold are key assets for global investors during turbulent times, but a liquidity crisis has diminished the safe-haven appeal of Treasuries, leaving gold as the primary option.  
- The report highlights that the recent surge in gold prices is largely due to the increased safe-haven value of gold amid the liquidity crisis in U.S. Treasuries, with the Fed's potential interest rate cuts further supporting gold's price rise.  
- Additionally, the report notes that central bank gold purchases are rising, contributing to higher gold prices, while recommending investment in gold-related stocks due to their growth potential.

Zheshang Securities: The safe-haven value of gold has surged sharply, optimistic about the continued rise in gold prices