In recent times, the global market has been undergoing a profound macro narrative reversal and an asset-pricing reset. The key driver comes from a 180-degree shift in expectations for Federal Reserve policy—from “rate cuts” to “rate hikes”—combined with the rapid unwinding of geopolitical risk premia, which has completely upended the operating logic behind various asset classes.

Gold has been the most typical casualty of this narrative reversal. The super bull-market logic previously built on “rate cuts + de-dollarization” has fallen apart, compounded by the U.S. Dollar Index reaching a 13-month high. Spot gold prices have fallen below $4,000, a retreat of about 30% from their historical peak. Institutions such as Goldman Sachs and Deutsche Bank have repeatedly cut their target prices.

Bitcoin is also under pressure, breaking below the $60,000 key level and reaching a new low since October 2024. Rate-hike expectations are suppressing risk appetite, and record outflows from spot ETFs have added to the market’s “short of both funds and narrative” dilemma.

Crude oil, however, has been following an independent logic—geopolitical risk premia have been clearing quickly. With easing tensions between the U.S. and Iran and resumption of traffic through the Strait of Hormuz, WTI crude oil has fallen to around $70, essentially giving back all gains since the beginning of the year from the Iran conflict.

Equity markets are showing extreme divergence. China A-share “ChiNext and STAR Market” indices have hit historical highs, but more than 4,200 individual stocks are declining, as capital becomes intensely concentrated in technology leaders. Hong Kong stocks: the Hang Seng Index is down nearly 9% year-to-date, while the technology index has fallen more than 20%. U.S. stocks are also facing short-term selling pressure as crowded positioning in tech stocks approaches five-year extremes and as quarter-end pension funds rebalance.

Looking ahead, the near-term focus is the U.S. May core PCE data to be released tonight (June 25). A result that comes in above expectations would reinforce the rate-hike logic and could trigger another round of risk-asset selloff. Over the medium term, the market’s focal point is the extent to which expectations for Fed rate hikes are already “fully priced.” Oil prices have already fallen significantly; if subsequent inflation data cools, the market may revise the currently overly hawkish expectations.

For China A-shares, the July earnings season is a key test for technology stocks to “separate the real from the fake.” For gold, structural supports such as central bank gold purchases over the medium to long term remain unchanged. For crude oil, geopolitical risk premia have not been fully eliminated. The current market is in a transition period where the old logic has unraveled and a new equilibrium is yet to form, with high volatility still the main theme. #现货黄金跌破4000美元