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Global Financial Markets Experience "Black Monday" -- In the Darkest Hour, Confidence Shines Brighter Than Gold

Today, global financial markets welcomed Black Monday, with the plunge in Asia-Pacific stocks and precious metals markets becoming the focal point. The Nikkei 225 index fell over 3%, South Korea's KOSPI index plummeted over 4%, China's three major indices opened sharply lower with over 5,000 declining stocks across Shanghai, Shenzhen, and Beijing markets; the precious metals market was equally devastated, with Shanghai silver falling over 4% daily, Shanghai gold falling over 1%, London gold and silver weakening in sync, and traditional safe-haven attributes completely failing. The cryptocurrency market was not spared either, with Bitcoin down 2%, Ethereum down over 3%, and over 200,000 liquidations in a single day. This cross-market crash even carried the whiff of financial crisis, but what really happened to the markets? Digging deeper, we found that neither fundamentals nor news flow revealed any major bearish factors, so facing this irrational decline, confidence becomes particularly important, because after the darkest hour, rebounds can arrive at any moment. 💪💪

👉Let's first examine the causes of the crash we can currently identify:

1. Fed Policy Shift: A Dramatic Reversal of Market Expectations

The shift in Federal Reserve policy direction is the core catalyst of this market crash. Previously, markets widely expected the Fed to cut rates 2-3 times in 2026, a premise that became important logic supporting global asset prices. However, a series of recent economic data and Fed statements completely reversed market expectations. U.S. February PPI growth exceeded expectations, with overall PPI rising 0.7% month-over-month, higher than the expected 0.3%, while year-over-year growth accelerated to 3.4%, showing persistent inflation pressure. Against this backdrop, the Fed maintained its federal funds rate target range at 3.50%-3.75% at its March meeting, with the dot plot showing policymakers expect only one rate cut in 2026, with even 7 officials supporting no rate cuts for the year. Market expectations thus plummeted from the early-year expectation of 2-3 cuts to less than one, with even voices of rate hikes emerging.

The reversal in Fed policy expectations directly triggered a repricing of global assets. The dollar index broke past 100, U.S. Treasury yields soared to near one-year highs, with 2-year Treasury yields breaking 3.8%. For gold, silver, and cryptocurrencies priced in dollars, a stronger dollar directly depressed prices, while Asia-Pacific stock markets faced capital outflow pressures from dollar strength.

2. U.S.-Iran Conflict Escalation: Inflation Retaliation and Failure of Safe-Haven Logic

The continuous escalation of Middle East geopolitical tensions is an important catalyst for this market crash. President Trump gave Iran a 48-hour ultimatum to open the Strait of Hormuz and threatened to destroy its power plants, while Iran responded aggressively with four countermeasures including complete closure of the Strait of Hormuz. The Strait of Hormuz handles about 20% of global oil and natural gas transport, with tensions raising market concerns about energy supply disruptions, causing international oil prices to surge, with WTI crude reaching $99.837/barrel and Brent crude reaching $108.390/barrel.

While geopolitical escalation naturally brings pullbacks in Asia-Pacific stocks and other risk assets, why did gold and silver prices also fall? The reason is a "rising oil prices → rising inflation → delayed rate cuts → falling precious metals" inverse transmission chain emerged in market sentiment. Rising energy prices strengthened market expectations for persistently high inflation, further solidifying the Fed's determination to maintain high rates, causing the holding costs of gold and silver to continue rising. Meanwhile, the high prices of gold and silver made many investors "nervous at heights," causing their safe-haven attributes to vanish and instead taking on characteristics of risk assets, forcing capital to flow into U.S. dollar cash—the traditional "final refuge."

3. Fund Stampede and Leverage Unwinding: Confidence Collapse Caused by Black Swans

The massive gains and high-leverage positions accumulated in prior markets triggered severe fund stampedes and leverage unwinding when negative factors concentrated, further amplifying market declines. In the preceding half year, gold prices rose 60%, silver prices doubled, accumulating substantial profit-taking. When the Fed released hawkish signals, these profit positions concentrated, triggering selling waves. Meanwhile, futures margin increases triggered stop-losses for longs, with algorithmic trading intensifying selling pressure, creating "longs killing longs." The silver market, with a scale merely 1/10 of gold's and leverage exceeding 35%, became the hardest hit, with declines far exceeding gold. Gold ETFs have experienced net outflows for three consecutive weeks, with holdings declining over 60 tons in three weeks, completely erasing the year's net inflows. We covered this in previous articles.

🙋To summarize in one sentence: while fundamentals show subtle changes, there are no major sudden factors causing today's market collapse. The reasons are more likely a concentrated venting of panic emotions accumulated since the U.S.-Iran war and a stampede triggered by the sudden crash from market's long-term high-leverage operations. The crash is short-term and accidental, likely difficult to sustain.

👉So where do markets go after the black swan? How should we respond?

Let's first look at history:

Today's gold crash has left many investors doubtful about gold's safe-haven properties. However, reviewing history, gold often returns to its long-term uptrend after experiencing crashes. In 2013, gold prices plummeted from around $1,700 per ounce to below $1,200, a decline exceeding 28%. At the time, bearish voices about gold were endless, with claims that gold's bull market had ended. But subsequently, gold prices gradually stabilized and even reached a record high of $2,075 per ounce during the 2020 pandemic.

Similarly, our mainland Chinese stock market also crashed 7% on April 7 last year due to U.S.-China trade war tensions, but then launched strong rebounds opening a bull market, with the Shanghai Composite gaining over 1,000 points during the period. Investors who cut their losses on April 7 probably wish they could "slap their thighs."

As for Bitcoin, there's even less to say—countless historical precedents have proven Bitcoin crashes are buying opportunities, with the market set to rise long-term. In 2018, Bitcoin prices plummeted from near the $20,000 high to around $3,000, a decline exceeding 85%. At the time, many believed Bitcoin had reached its end. However, in 2020, Bitcoin prices began rising sharply and even reached a record high exceeding $60,000 in 2021. In 2022, Bitcoin experienced another crash, with prices falling from over $40,000 to below $15,000. But subsequently, Bitcoin prices gradually recovered, reaching a peak of $126,000 in 2025.

🙋One sentence summary: For quality assets, "black swans" are "lucky birds" letting you profit from buying the dip—don't panic sell, confidence is more valuable than gold!

👉Having said so much, how should we currently operate?

✅If you're holding a full position, I advise you to shut down your account and do something relaxing, then check back in 2 days. You might find your assets have returned to their original state—market bears come from nowhere and return to nowhere. There's no need to stress and feel down for 2 days unnecessarily. After all, life's most important thing is happiness! 😊😊😊

✅If you're currently in cash, you can start accumulating positions in tranches. Pay attention to these price points:

Gold: Watch the 4,000 round number, can establish an initial position above 4,000, add on breaks below 4,000, place stop-loss below 3,800

Silver: Follow gold's trend, can establish initial position if it falls to 50+, add positions after gold breaks below 4,000, place stop-loss below 50 dollars

BTC: Establish initial position at current price, add on breaks below 67,500, stop-loss at below 67,000

ETH: Establish initial position at current price, add on breaks below 2,021, stop-loss at below 2,000

💡Meanwhile, when accumulating positions, also note these tips:

1. Hold onto quality assets: The core of long-term investing

During market crashes, stocks of quality enterprises are often erroneously sold off. These enterprises possess strong profitability, solid financial condition, and broad development prospects, maintaining stable operational performance even during market downturns. Investors should hold these quality assets and patiently await market rebounds.

For assets like gold and Bitcoin, investors should also take a long-term perspective and not be deceived by short-term price fluctuations. Gold, as a scarce resource, possesses value preservation and appreciation functions; Bitcoin, as an emerging digital asset, holds high investment potential. As long as investors can withstand short-term price swings, long-term holding often yields decent returns.

2. Diversify investments appropriately

Don't place all funds into a single asset, but rather diversify investments across different asset classes such as stocks, bonds, gold, Bitcoin, etc. This way, when one asset class declines, other classes might perform well, offsetting some losses.

3. Manage position size: Flexibly respond to market changes

During uncertain market periods, managing position size is extremely important. Investors shouldn't go all-in, but should retain cash reserves to capitalize on better investment opportunities when they appear.

Meanwhile, investors should also adjust positions appropriately based on market changes. When markets show sufficient rebounds, can take profits and reduce positions; when markets decline again, should promptly establish new positions and accumulate on dips.

Well, having said all this, brothers, drink this bowl of chicken soup and start accumulating on dips! Wishing everyone daily wealth! 💰💰💰