Why hasn't gold prices surged despite falling oil prices?

Oil prices plummeting eases inflation and interest rate pressures, so why hasn't gold been saved? Nobel laureate reveals that all asset baskets this week are actually competing for the "egg" of gold! When will gold prices turn around in the asset basket?

This week, the macro market has welcomed a significant window of geopolitical easing, but the reactions of major assets have shown an extremely counterintuitive "asymmetry."

The biggest macro variable occurred in the Middle East. Driven by the extension of the US-Iran ceasefire agreement and hopes for the resumption of the Strait of Hormuz, the Damocles sword hanging over inflation was temporarily lifted. Oil prices experienced a fierce sell-off this week, with a weekly decline of over 10%.

According to traditional linear logic, a sharp drop in oil prices indicates easing inflation concerns, which should provide strong support for gold that has been tormented by high interest rates, even triggering a strong reversal. However, the reality on the market has been extremely brutal.

This Thursday, although gold rebounded due to the weakening dollar and digesting geopolitical news, the weekly spot gold price once broke below its two-month lows. The collapse of oil did not seem to become a lifeline for gold.

Why did oil prices fall, yet gold still struggle so much?

Faced with this anomaly where the single-line macro logic has failed, we need to call upon a heavyweight in macroeconomics—James Tobin.

Tobin is best known for the saying "Don't put all your eggs in one basket," which behind this popular phrase is his Nobel Prize-winning portfolio selection theory.

He pointed out that the biggest mistake market analysts make is equating gold with oil and inflation, ignoring the broader perspective of capital operation.

Global funds are a total reservoir. Investors are not trading gold in a vacuum but are constantly comparing the cost-effectiveness of assets within a "portfolio" composed of stocks, US bonds, the dollar, and gold.

This week, the sharp decline in oil prices indeed eased inflation worries but also drained the market's "geopolitical safe-haven sentiment." As expectations of peace and US stocks reaching new highs under AI narratives ignited risk appetite, capital was fully rekindled. Meanwhile, the previously high US bond yields have not substantially fallen, and the dollar remains relatively resilient.

Within Tobin's framework, gold faces an awkward situation in the current asset basket:
- In terms of aggressiveness, it cannot compete with frenzied stocks;
- In terms of certainty of returns, it cannot match US bonds with a 5% risk-free rate.
During portfolio rebalancing, funds naturally tend to abandon less attractive assets like gold.

Following Tobin's asset portfolio choice framework, we can clearly see that what truly strangled gold this week was not oil prices but the siphoning effect of other assets.

First: The evaporation of safe-haven premiums

The surge in gold prices in recent months largely priced in the extreme tail risk of Middle Eastern conflict spreading. This week, the extension of the US-Iran ceasefire directly removed the risk premium on oil and also deprived gold of its core "doomsday asset" buying. As geopolitical panic receded, funds rebalanced from safe assets to risk assets, becoming the first major gravitational pull suppressing gold prices.

Second: The magnified disadvantage of opportunity cost

This is the core of Tobin's theory. Gold, as a non-interest-bearing asset, is at an extreme disadvantage compared to other yielding assets. Although inflation expectations cooled, long-term US bond yields remained at very high levels. In an environment where holding cash or short-term bonds can easily yield over 5% risk-free, the "opportunity cost" of holding gold becomes extremely expensive. Rational portfolios will inevitably reduce gold holdings and increase allocations to fixed income assets.

Third: Liquidity siphoning from new highs in the stock market

US stocks are experiencing an epic "irrational euphoria." As tech stocks continuously break through historical ceilings, this strong profit effect acts like a black hole, sucking away liquidity from the market margins. Under the instructions of portfolio rebalancing, institutional investors are more inclined to sell defensive positions like gold to chase the soaring risk assets.

Through Tobin's portfolio choice theory, we see clearly that the real reason for gold's decline this week is not oil prices but the siphoning effect of other assets.

The first: The evaporation of safe-haven premiums

In recent months, gold's surge largely priced in the tail risk of Middle Eastern conflict escalation. This week, the extension of the US-Iran ceasefire directly removed the risk premium on oil and also deprived gold of its core "doomsday asset" buying. As geopolitical panic receded, funds rebalanced from safe assets to risk assets, becoming the first major gravitational pull suppressing gold prices.

The second: The magnified disadvantage of opportunity cost

This is the core of Tobin's theory. Gold, as a non-interest-bearing asset, is at an extreme disadvantage compared to other yielding assets. Although inflation expectations cooled, long-term US bond yields remained at very high levels. In an environment where holding cash or short-term bonds can easily yield over 5% risk-free, the "opportunity cost" of holding gold becomes extremely expensive. Rational portfolios will inevitably reduce gold holdings and increase allocations to fixed income assets.

The third: Liquidity siphoning from new highs in the stock market

US stocks are experiencing an epic "irrational euphoria." As tech stocks continuously break through historical ceilings, this strong profit effect acts like a black hole, sucking away liquidity from the market margins. Under the instructions of portfolio rebalancing, institutional investors are more inclined to sell defensive positions like gold to chase the soaring risk assets.

By applying Tobin's portfolio choice theory, we can thoroughly understand the essence of gold's decline this week: oil prices falling only removed the inflation alarm but did not give gold a relative advantage over other major assets.

Capital is always seeking the optimal risk-return ratio. Tobin's theory provides a more objective perspective for asset allocation in complex environments:

1. Recognize the limitations of single-asset logic: Do not judge an asset's absolute attractiveness solely based on one variable (such as falling oil prices). When assessing gold's future potential, it should be evaluated within a relative comparison framework with other major assets (especially real interest rates and stock performance).
2. Objectively view the cyclical misalignment of safe-haven assets: When geopolitical risk premiums recede and market risk appetite is high, traditional safe assets often face phased liquidity withdrawal. During this stage, investors may reassess the strategic weight and defensive positioning of precious metals in their overall portfolio.
3. Pay attention to potential turning points in "portfolio rebalancing": Gold's current disadvantages stem from stock market euphoria and high bond yields. However, if high real interest rates cause unbearable damage to the real economy or financial system, leading to sharp corrections in risk assets (and a rebound in safe-haven demand), the rebalancing indicator will once again point toward gold.

Understanding capital flows is far more important than rigidly adhering to a single logic. #交易CFD送黄金