Gold can become a liquidity cash-out tool under extreme pressure. This view is quite counterintuitive, but both 2008 and 2020 indeed followed this path, worth pondering carefully.

CoinWorld News, China International Capital Corporation Wealth Futures states that the current stage of gold price movement is highly correlated with liquidity pressure levels. As liquidity pressure intensifies, traditional safe-haven hedging logic will undergo drastic changes or even become invalid. Under extreme pressure, the nature of gold shifts from a "hedging asset" to a "high liquidity cash-out asset," usually involving margin calls and cross-asset risk parity rebalancing. Liquidity shocks similar to those experienced by gold have been reflected in 2008, 2020, and the "Wash Trade" earlier this year. Currently, factors such as oil prices and U.S. Treasury yields still exert significant pressure on gold, and it is recommended to observe.