Meanwhile, safe-haven flows are being redirected towards US Treasuries, the Swiss franc and the Japanese yen, which offer either contractual income, currency stability or defensive characteristics. More importantly, the global economy is transitioning from a savings glut to a capital formation regime. Governments and corporations are competing for capital to finance AI infrastructure, semiconductor manufacturing, defence, electrification and energy security. This could sustain a structurally higher cost of capital, increasing the opportunity cost of holding gold. Consequently, equities and gold can correct simultaneously as investors reassess capital allocation rather than simply respond to geopolitical risks.
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