Global financial markets are experiencing heightened volatility as the world economy reaches a critical juncture in 2026. Shifts in macroeconomic cycles are creating new cross-asset trading opportunities, with investors actively discussing how to capitalize on them.

At the recent "2026 Market Outlook Forum" hosted by London Stock Exchange Group (LSEG), David Day, Managing Director for Asia Pacific at LSEG, stated that despite global headwinds, China's economic fundamentals remain solid. This is evident in stabilizing economic indicators, resilience in key sectors, and gradually strengthening market confidence. LSEG has observed these developments and remains committed to enhancing the international connectivity and resilience of China's financial markets.

LSEG is steadily advancing plans for clearing and settling offshore renminbi foreign exchange derivatives and preparing to expand the range of eligible non-cash collateral to include Chinese government bonds denominated in offshore renminbi. These initiatives are expected to be implemented in the second quarter of 2026, pending regulatory approval.

Multiple forum participants noted that global capital allocation to renminbi-denominated assets is progressively increasing. This trend is linked to the rising importance of Chinese assets in global supply chains and reflects China's long-term economic resilience and growth potential.

Gold prices are still expected to rise over the long term. The global economic landscape is undergoing significant adjustments, with international trade systems seeking a new balance amid competition and restructuring. Growth trends among major economies continue to diverge, contributing to volatility in global financial markets. Gold, due to its unique asset characteristics, has become a central focus.

Since last year, the spot price of gold in London experienced a historic rally, reaching an all-time high of 5,598.75 points on January 29 this year, before plummeting on January 30 in a sharp correction. The latest price hovers around $4,700 per ounce.

Economist Hong Hao believes the primary driver of this adjustment is changing liquidity conditions. To anticipate market movements ahead of time, it is insufficient to focus solely on Federal Reserve interest rates, monetary policy minutes, or U.S. inflation data. The key lies in understanding the direction of global liquidity shifts in advance.

"Global liquidity leading indicators began to decline after hitting historic highs from the fourth quarter of last year to the beginning of the first quarter this year. Even without risk events like geopolitical conflicts or surging oil prices this year, the liquidity environment would still be marginally tightening, impacting prices of global risk assets," Hong Hao stated.

He suggested that if liquidity tightens marginally this year, combined with the People's Bank of China's 17 consecutive months of gold purchases, long-term U.S. Treasury yields could rise. If U.S. Treasury credit weakens and yields increase, gold prices might see significant gains a year later. Both fundamental and narrative logic support the possibility of gold prices doubling.

Liang Zhonghua, Chief Macro Analyst at Guotai Haitong Securities, also believes the investment opportunity in gold is not over. He emphasized the need to view gold from a new perspective and find appropriate ways to capture its investment potential.

"Before 2022, the core anchor for gold pricing was the real U.S. dollar interest rate. Since then, a new key indicator has been added: changes in trust between nations. The current rise in gold prices reflects declining global trust, with gold having decoupled from real U.S. dollar interest rates. Once the trust system is broken, rebuilding it often takes a long time," Liang Zhonghua explained.

He views the medium to long-term upward trend for gold as solid, with deeper corrections likely attracting bottom-fishing capital. However, he cautioned that gold's increased volatility post-decoupling requires risk awareness. For assets with long-term opportunities but short-term sharp fluctuations, dollar-cost averaging is a suitable strategy—gradually increasing exposure during significant pullbacks while remaining cautious during rapid short-term rallies.

Wang Yan, Deputy General Manager of Bank of China's Shanghai RMB Trading Business Headquarters, analyzed gold's role in asset allocation, noting that gold has evolved from a pure safe-haven asset to a core asset with strategic allocation, credit hedging, and volatility management functions. Amid various uncertainties, gold is an important option for diversifying investment portfolios, a role becoming increasingly prominent and showing rigid, long-term trends.

From the perspective of Chinese assets, is there further room for increased global allocation? Zhu Chaoping, Executive Director and Global Market Strategist at JP Morgan Asset Management, believes the role of the renminbi should align with that of Chinese assets. Recent changes indicate that Chinese assets are becoming more important, notably reflected in their rising position within global supply chains, further strengthened during the U.S.-Iran conflict.

"As a fund management company, we have been selecting potential investment targets in China and observe two significant changes," Zhu Chaoping detailed. "First, the AI-driven hotspot chain has expanded from optical modules and PCBs to non-ferrous metals and power equipment. Initially focused on advanced U.S. chips, market attention has gradually shifted to foundational manufacturing segments with stringent requirements for capacity, quality, and cost—areas ultimately established in China. Second, the resilience and diversification of China's industrial chain have been further validated in recent geopolitical conflicts, due to years of investment in new and renewable energy, significantly reducing reliance on crude oil. Thus, Chinese assets are less impacted by geopolitical conflicts compared to other Asian economies."

Zhu Chaoping argued that under these conditions, China will remain the primary supplier with sustainable manufacturing competitiveness, supporting global technological and industrial growth. Steady growth in related demand is expected to translate into profitability for corresponding listed companies or enterprises in China.

"With such high-quality industries and investment return foundations, the renminbi will naturally gain further support. Historical experience shows that when Chinese stock markets rise, offshore renminbi tends to appreciate, mainly due to sustained inflows of foreign capital allocating to Chinese assets. Currently, foreign recognition of the certainty of Chinese assets is increasing," Zhu Chaoping added.

From an institutional investor standpoint, Wang Yan observed that global capital allocation to renminbi-denominated assets is progressively increasing, closely tied to China's long-term economic resilience and future development potential. This trend represents a rational choice in global asset allocation.

Wang Yan identified three key drivers boosting investment in China's bond market: diversification of sovereign reserve assets, with renminbi bonds offering stable interest rate formation and low correlation to assets like the U.S. dollar, attracting reserve funds; inclusion of renminbi bonds in three major international bond indices, with weights generally reaching 10%, driving sustained passive fund allocation; and growing emphasis on diversification strategies, leading to active increases in allocations to non-U.S. dollar assets with low correlation, thereby creating more opportunities for renminbi assets.

She also stressed that beyond short-term returns, cross-asset investment requires attention to investability, market liquidity, and policy predictability. China's capital markets continue to improve in these areas, enhancing cross-border investment convenience through mechanisms like Connect programs, further attracting long-term foreign capital.

Looking ahead, do global asset classes offer phased trading opportunities or established medium to long-term allocation trends? What is the core logic behind this? Zhang Yingxiao, Product Director at Ping An Bank's Head Office Funds Operations Center, believes both trend and trading opportunities coexist, with the key lying in the nature of the capital. From an allocation perspective, Chinese assets are gradually becoming global safe-haven assets. Chinese government bonds, characterized by large scale, low volatility, and strong credit quality, are particularly favored during risk repricing.

"Since the first quarter of this year, market liquidity has continued to improve. According to the core liquidity 50 credit bond index, overall liquidity in China's credit bond market increased by 7%, with bonds from central state-owned enterprises rising by 13%. Improved liquidity among leading enterprises provides new opportunities for various liquidity trading strategies," Zhang Yingxiao stated. Overall, current market conditions allow different types of capital to meet their needs, offering sound allocation and trading value.

What factors must be balanced when conducting cross-asset allocation? Wang Yan highlighted three key balances: between the U.S. dollar cycle and gold strategy to avoid extreme allocations; between short-term volatility and long-term trends, clarifying whether the investment purpose is short-term hedging or long-term value preservation to dynamically adjust gold positions and holding periods; and between portfolio returns and diversification effects, closely monitoring asset correlations and optimizing dynamically in a more volatile market environment.

"Amid increased market volatility, extreme market movements can occur. Therefore, portfolio management should strengthen single-asset limit management to avoid market liquidity risks under extreme conditions," Wang Yan concluded.