TradingKey - Against the backdrop of current intense global market turbulence, escalating geopolitical risks, and a mix of bullish and bearish macroeconomic signals, market risk aversion continues to rise. Faced with increasing uncertainty, more and more investors are beginning to seek safe havens that can preserve value and resist risk.

For a long time, gold ( XAUUSD) has been regarded as "hard currency" in the traditional sense. When financial market turmoil and systemic risks arise, it often becomes a favored safe-haven asset for capital. Especially in the recent environment of intensified international uncertainty, gold has once again moved to the center of the spotlight.

However, gold's price action has been exceptionally volatile recently, characterized by rapid pullbacks following sharp rallies. Overall volatility has surged, reaching its highest level since the 2008 global financial crisis. This intense volatility precisely reflects rising market risk expectations and suggests that relying solely on gold to hedge risks faces challenges.

The dramatic reshuffling of gold prices has raised a core question for investors: In today's market landscape of high volatility, high uncertainty, and intense cross-asset correlation, is gold still the only reliable safe-haven choice? Clearly, the answer is not absolute.

While gold still possesses safe-haven attributes such as inflation hedging, offsetting currency depreciation, and resisting geopolitical instability, it also faces issues like short-term decoupling and excessive sentiment-driven volatility. In particular, current market divergence regarding the Federal Reserve's policy direction, inflation trends, and the outlook for a global recession has made gold prices more elastic and their direction harder to judge.

Therefore, for investors with strong risk control awareness and a high demand for diversified asset allocation, relying solely on gold as the only safe-haven asset may not be prudent enough. It is necessary to broaden one's horizons and focus on other asset classes with risk-hedging functions.

The US Dollar and USD Cash-Equivalent Assets

In the context of intensified geopolitical conflicts, severe financial market volatility, or the eruption of debt crises, market risk appetite often declines rapidly. At such times, global capital typically flows quickly toward the US dollar and its related assets due to safe-haven demand, driving up the dollar's exchange rate. Numerous instances of market turmoil in history have confirmed this trend. Whether it was the 2008 global financial crisis, the early stages of the COVID-19 pandemic in 2020, or the outbreak of the Russia-Ukraine conflict in 2022, the US Dollar Index (DXY) showed significant strengthening, reflecting its role as a "safe haven."

Several major advantages of USD assets are demonstrated during times of turmoil:

• Extremely high liquidity: capable of rapid liquidation and market entry/exit;
• Relatively strong value preservation: good risk-resistance capability and high market recognition;
• Ease of allocation: individuals and institutions can quickly allocate to USD cash accounts, short-term USD assets, or USD-pegged financial instruments.

However, the safe-haven status currently enjoyed by the US dollar is being impacted by several long-term factors. Although the dollar's ability to respond to extreme events remains, the foundation of trust in it as a global reserve currency is facing challenges. As the United States pursues protectionist trade policies, such as the frequent use of tariffs, some countries have grown skeptical about the stability of US economic policy. Furthermore, the massive US fiscal deficit and the expanding scale of national debt have also led investors to worry about its fiscal sustainability. These factors are gradually eroding market confidence in the long-term value of the dollar.

On the other hand, during certain stages, the accommodative monetary policies adopted by the Federal Reserve may lead to periodic weakness in the dollar, further impacting its actual purchasing power. In a high-inflation environment, even if nominal interest rates rise, the real value of USD assets held by consumers may still be eroded.

US Treasuries

Renowned as the "world's safest asset," the 10-year US Treasury note has long been an important tool for risk hedging in international capital markets. As government credit debt issued by the world's largest economy, it is backed not only by strong sovereign credit but also by the reserve currency status of the US dollar and the high liquidity provided by the massive repo market. Together, these factors build a deep market foundation for US Treasuries, making them a frequent top choice for global safe-haven capital flows during periods of economic or financial instability.

Whenever investors have doubts about the economic outlook or market expectations for potential systemic financial risks rise, institutional capital often first chooses to significantly reduce holdings of high-risk assets such as stocks and commodities, turning instead to US Treasuries to seek a relatively certain source of return. This safe-haven maneuver has become a typical allocation strategy when "risk appetite cools down."

However, despite Treasuries still having a safe-haven function, their valuation itself faces structural risk factors. The US government's fiscal deficit remains high over the long term, and the scale of debt continues to grow, leading to rising market concerns over its fiscal sustainability. Additionally, the uncertainty of the Federal Reserve's policy cycle has not been fully eliminated.

Japanese Yen and Swiss Franc

The Japanese yen and the Swiss franc have traditionally been regarded as more stable currency options in international markets. During periods of geopolitical tension, significant financial market volatility, or an unclear economic outlook, they are often used by capital as alternatives to avoid high-risk assets. The formation of this safe-haven function primarily stems from multiple factors, including the robust economic structures and sound fiscal conditions of both countries, as well as the relative stability of their monetary policy implementation.

In terms of the balance of payments, both Japan and Switzerland have long maintained large net foreign assets, resulting in low external vulnerability for their domestic economies and a considerable capacity to withstand financial pressure. At the same time, the foreign exchange market mechanisms in both countries are standardized, policy communication is clear, and the frequency of intervention is relatively low, creating strong anticipatory stability for investors.

Although the widening interest rate differentials between major global economies have currently weakened the attractiveness of the yen and the franc in terms of yield, when market sentiment shifts from chasing returns to risk avoidance, the safety of these currencies often regains dominance.

However, following the Japanese election, the market generally expects that proactive fiscal policy will continue under the leadership of Prime Minister Sanae Takaichi, including the previously proposed $135 billion stimulus plan to alleviate inflationary pressures. The market maintains a wait-and-see attitude toward the future direction of the yen.

Other Precious Metals such as Silver

In addition to gold, silver ( XAGUSD) also holds an important position in the precious metals market. Compared to gold, silver possesses dual characteristics of "precious metal monetary attributes" and "industrial utility." It can serve as an inflation hedge and also plays a key role in sectors such as manufacturing, photovoltaics, electronics, and electric vehicles. Consequently, its price is driven by both market sentiment and industrial demand, possessing high sensitivity and volatility.

During periods of rising inflation expectations, dollar depreciation, or sharp rallies in gold, silver often exhibits a certain "catch-up effect," becoming a potential choice for investors seeking alternative safe-haven assets.

However, because the overall trading volume of the silver market is smaller than that of gold, price fluctuations in the short term are more intense. Risk control should be a focus when investing, and it is particularly inadvisable to hold heavy positions at highs or to chase rallies and sell off during dips.

Besides silver, precious metals like palladium and platinum also possess certain safe-haven attributes, but they are more widely used in their capacity as industrial metals.

Taking palladium as an example, it is widely used in automobile exhaust purification systems, and its price is highly dependent on the cyclical fluctuations of the auto industry. Platinum is commonly found in jewelry manufacturing, chemical equipment, organic catalysis, and other fields; its price fluctuations are mostly affected by supply bottlenecks or industrial demand disruptions. Therefore, these precious metals are more suitable for investors with certain industrial analytical capabilities.

Defensive Stocks

During periods of unstable market sentiment and uncertainty in the economic outlook, certain industry sectors with stable operational characteristics can often provide stronger risk resistance, becoming important destinations for investment capital to temporarily avoid volatility. Among these, defensive stocks represented by utilities, healthcare, and consumer staples are particularly prominent.

Such companies usually possess robust business models and consistent cash flows, with their products or services maintaining stable demand throughout various economic cycles. For instance, residential use of water, electricity, and gas, reliance on basic healthcare resources, and the purchase of essential consumer goods in daily life are not significantly weakened by short-term economic fluctuations. This makes the profitability of relevant companies relatively independent of the macroeconomic cycle and less prone to being dragged down by economic downturns.

Furthermore, leading companies in defensive industries often possess strong market shares and mature management mechanisms, allowing them to maintain stable operations without over-relying on financing for expansion. This gives them a relative advantage in environments with frequent interest rate changes or tightening credit. From a capital market perspective, their stock price volatility is generally lower than that of growth or cyclical companies, providing a "cushion" effect that makes them more likely to gain market favor, especially when the broader market experiences severe turbulence or safe-haven sentiment is strong.

It is worth noting that while defensive stocks do not win through high-speed growth, their stability holds significant value at the allocation level. When constructing an asset portfolio and responding to market volatility, appropriately allocating a certain proportion of such targets helps to smooth overall volatility and enhance portfolio resilience.

There is No Permanent Safe Haven

Entering 2026, global financial markets are at the intersection of escalating geopolitical tensions, misaligned economic cycles, and accelerating technological evolution. The market landscape is becoming more multipolar, and volatility has increased significantly. Traditional linear thinking is no longer sufficient to explain the current situation of uncertainty.

From the lingering conflict in Eastern Europe and tensions in the Middle East to the undercurrents of competition for Arctic resources, regional conflicts and strategic frictions occur frequently, further driving up global safe-haven sentiment. A series of overlapping geopolitical and macroeconomic risks present investors with unprecedented challenges.

Against this backdrop, the safe-haven effect of traditional "safe assets" is being re-examined. Close observation reveals that almost no asset class can consistently maintain stability and returns in all market environments; risk is manifesting more dispersed and complex characteristics.

In other words, "set-it-and-forget-it" safe havens no longer exist. The key to coping with such multi-variable driven market changes lies in returning to rational principles and strengthening portfolio management: diversifying asset distribution, controlling leverage levels, and improving resilience to unexpected events.

This also serves as a reminder that we should not bet on any single asset or short-term trend. Building an asset portfolio with adaptability and endurance is the effective means to cope with uncertainty. The current core strategy should be based on diversified allocation, cautious operation, and continuous optimization, providing stronger resilience for investments regardless of how the market evolves.

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