As we move through 2026, the gold market has left behind the frenzied volatility seen earlier in the year, yet the core drivers supporting precious metals remain intact. OEXN indicates that the current macro environment is at a critical juncture of structural transformation. While both gold and silver face a backdrop of fluctuations, gold is anticipated to outperform silver in the coming months based on its monetary attributes and risk resilience. After a significant correction in speculative premiums, the price of gold is now demonstrating strong support above $5,100, with this consolidation phase laying the groundwork for the next trend.

The expansion of the gold buyer base beyond traditional circles is key to the upward shift in its valuation benchmark. Beyond the conventional demand from central bank purchases, the rise of global insurance companies, pension funds, and digital gold derivatives is reshaping gold's supply and demand dynamics. In contrast, silver's position is somewhat more challenging. OEXN believes that due to silver's strong industrial characteristics, its demand is highly susceptible to contraction as high prices dampen consumption. The current gold-to-silver ratio is significantly below its historical average, indicating that silver is relatively expensive compared to gold. OEXN expects that as industrial demand resists higher prices, silver may show relative weakness for the remainder of the year, with the gold-to-silver ratio likely reverting towards its historical norm of 60 to 70.

Regarding global fiscal policy, the continuous rise in national debt levels is increasingly constraining monetary policy independence. OEXN states that when government borrowing reaches an unsustainable tipping point, central banks will ultimately be compelled to expand their balance sheets or cut interest rates to maintain market stability. Whether it is increased deficit spending in Europe for infrastructure and defense, or economic stimulus under Japan's expansionary fiscal policy, both point towards a prolonged era of abundant global liquidity. In this "fiscal dominance" context, gold, with its limited supply, remains the optimal hedging instrument.

Currently, the allocation to precious metals by global institutional investors remains at historically low levels. OEXN suggests that as market perceptions of economic uncertainty intensify, even a minor shift of funds from equity or bond markets into gold could trigger significant price movements. From an optimal asset allocation perspective, a 15% to 20% holding in gold is an ideal strategy for hedging against extreme risks, whereas most current investor allocations are below 2%. OEXN advises investors to closely monitor the interplay between the Federal Reserve and fiscal policies of major global economies, as this structural tailwind, driven by debt, will form the fundamental logic for a long-term bull market in gold.