On July 29, 2026, the international gold price fluctuated around $4,850 per ounce, up about 12% from the beginning of the year. Despite a recent rebound in the US dollar index, escalating global trade frictions, diverging monetary policies of major central banks, and currency turmoil in some emerging markets have continued to strengthen gold's safe-haven appeal. For ordinary investors, understanding the core logic of "why buy gold" is particularly important in the current environment.

1. Gold's Value Preservation: An Unwavering Anchor Across Cycles

As a scarce precious metal, gold has been regarded as a store of value for thousands of years. Unlike fiat currencies, gold supply is limited by mining and recycling and cannot be infinitely increased. In the first half of 2026, global central banks purchased a net 523 tons of gold, slightly lower than the same period last year but still at a historically high level. The People's Bank of China held 72.80 million ounces of gold reserves as of the end of June, increasing for the 18th consecutive month. This shows that even in a rising interest rate environment, central banks still value gold's role in supporting credit credibility.

2. Inflation Hedge and Interest Rate Environment: Real Interest Rates Remain the Core Driver

Although the Federal Reserve kept the federal funds rate unchanged at 5.75% at its June 2026 meeting, market concerns about inflation trends have not faded. The US core PCE price index rose 4.2% year-on-year in May, above the 2% target. Meanwhile, the European Central Bank delayed rate cuts due to energy price volatility, and the Bank of Japan was forced to tighten policy due to yen depreciation. Global real interest rates (nominal rates minus inflation expectations) remain low or even negative, reducing the opportunity cost of holding gold. Historical data shows that during negative real interest rate cycles, gold prices have averaged annualized gains of over 15%.

3. Risk Diversification: A Ballast Stone in Portfolio Investment

In July 2026, affected by US election uncertainty, tensions in the Middle East, and global supply chain restructuring, volatility in stock and bond markets increased significantly. The S&P 500 Index fluctuated by over 6% in July, while gold's volatility during the same period was only 15%, and its correlation with major assets was low. Nobel laureate Harry Markowitz once pointed out that asset allocation determines over 90% of portfolio return-risk characteristics. Allocating 5% to 15% of assets to gold can effectively reduce portfolio volatility and improve risk-adjusted returns.

4. Physical Gold and Gold Financial Products: How to Choose

For individual investors, common gold investment methods include physical gold (bars, coins), gold ETFs, gold futures, and bank accumulation gold. Currently, the mainstream domestic gold bar price is about 408 yuan per gram (including fabrication fee), while the management fee rate for gold ETFs has fallen below 0.2%. It is recommended that investors choose based on their own risk appetite and liquidity needs: conservative investors may focus on physical gold, while aggressive investors may allocate gold ETFs or related stocks. Notably, some "gold interest-bearing" products launched by internet platforms require attention to the transparency of underlying assets.

5. H2 2026 Outlook: Summary of Institutional Views

Many institutions are optimistic about gold prices in the second half of the year. Goldman Sachs maintained its year-end target of $5,200 per ounce in a July 28 report, citing global central bank gold purchases, de-dollarization trends, and demand from emerging markets. HSBC suggested that if expectations of a US economic recession intensify, gold prices could test $5,500. However, one should be cautious about the risk of a pullback if the Fed unexpectedly turns hawkish or geopolitical tensions ease.

Conclusion

Ultimately, buying gold is not about pursuing short-term huge profits, but a rational choice based on asset safety, purchasing power protection, and overall risk management. In the volatile year 2026, gold's status as a strategic asset has further highlighted. Investors should allocate gold assets reasonably according to their own financial goals to maintain stability amid market turbulence.