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

Today, global financial markets welcomed Black Monday, with the sharp decline in Asia-Pacific stocks and precious metals markets becoming the focal point. The Nikkei 225 Index fell more than 3%, South Korea's KOSPI Index plummeted over 4%, and China's three major indices opened significantly lower, with over 5,000 declining stocks across Shanghai, Shenzhen, and Beijing; the precious metals market was equally devastated, with Shanghai silver dropping over 4% in a single day, Shanghai gold declining over 1%, and London gold and silver weakening in sync, with traditional safe-haven properties completely losing effectiveness. 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 evoked the scent of financial crisis, but what's really wrong with the market? Digging to the root, we've found that neither the fundamentals nor the news carry particularly heavy bearish signals. In the face of such irrational decline, confidence becomes especially important, because after the darkest hour, a rebound can arrive at any time. 💪💪
👉Let's first look at the crash causes we can currently identify:

1. Federal Reserve Policy Shift: A Dramatic Reversal of Market Expectations

The shift in the Federal Reserve's policy direction is the core trigger for this market crash. Previously, the market widely expected the Fed to cut rates 2-3 times in 2026, a projection that served as important logic supporting global asset prices. However, a series of recent economic data and Fed statements have completely reversed market expectations. The US February PPI exceeded expectations, with overall PPI rising 0.7% month-over-month, surpassing the expected 0.3%, and accelerating 3.4% year-over-year, indicating stubborn inflation pressure persists. Against this backdrop, the Federal Reserve's March FOMC meeting maintained the federal funds rate target range at 3.50%-3.75%, and the dot plot showed policymakers expect only one rate cut in 2026, with even 7 officials supporting no rate cuts for the entire year. Market expectations thus plummeted from the early-year forecast of 2-3 cuts to less than 1, with even talk of rate hikes emerging.

The reversal in Federal Reserve policy expectations directly triggered a repricing of global assets. The US Dollar Index broke through the 100 level, and US Treasury yields surged to near-year highs, with 2-year Treasury yields breaking 3.8%. For gold, silver, and cryptocurrencies priced in US dollars, a stronger dollar directly depressed their prices, while Asia-Pacific stocks faced capital outflow pressure triggered by dollar strength.

2. US-Iran Conflict Escalation: Inflation Backfires and Safe-Haven Logic Fails

The continued escalation of Middle East geopolitical conflict is an important catalyst for this market crash. US President Trump gave Iran 48 hours to open the Strait of Hormuz and threatened to destroy its power plants, and Iran responded firmly with 4 countermeasures including completely closing the Strait of Hormuz. The Strait of Hormuz handles approximately 20% of global oil and natural gas transportation, and the escalation sparked market concerns about energy supply disruptions, with international oil prices surging at one point, WTI crude oil rising to $99.837 per barrel and Brent crude to $108.390 per barrel.

The escalation of geopolitical conflict naturally brings adjustments in risk assets like Asia-Pacific stocks and cryptocurrencies, but why did precious metals prices also fall? The reason is that the market formed a "reverse transmission chain" of "oil price up→inflation rises→rate cuts delayed→precious metals down." The rise in energy prices strengthens market expectations for sustained high inflation, further solidifying the Fed's determination to maintain high rates, causing the holding costs of precious metals to continue rising. Meanwhile, the elevated prices of gold and silver caused many investors to develop "fear of heights," stripping away the safe-haven properties and instead adopting characteristics of risk assets, forcing capital to rush toward US dollar cash as the traditional "last refuge."

3. Fund Stampede and Leverage Liquidation: Confidence Collapse in Black Swan Events

The enormous gains and high-leverage positions accumulated in prior markets triggered serious fund stampedes and leverage liquidations when bearish factors concentrated, further amplifying market declines. Over the previous half year, gold prices rose 60%, silver prices doubled, accumulating massive profit-taking positions. Once hawkish Fed signals were released, these profits were cashed in collectively, triggering selling waves. Meanwhile, futures market margin increases triggered long stop losses, and programmed trading intensified selling pressure, forming a "longs killing longs" scenario. The silver market, with a scale only 1/10 of gold and leverage exceeding 35%, became the hardest hit area, with declines far exceeding gold. Gold ETFs have experienced net outflows for three consecutive weeks, with holdings reduced by over 60 tons in just three weeks, wiping out all net inflows for the year. We've discussed this in previous articles.

🙋To summarize in one sentence: although the fundamentals have experienced some subtle changes, there are no major unexpected factors causing today's market crash. The underlying reasons are likely a concentrated catharsis of panic emotions accumulated since the US-Iran war, combined with a stampede triggered by sudden crashes under the market's long-term high-leverage operations. The crash is short-term and accidental, with a high probability of not being sustained.

👉So where will the market head after the black swan, and how should we respond?

Let's first look at history:

Today's gold crash has made many investors doubt 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 that time, bearish voices on gold were constant, with many believing gold's bull market had ended. But subsequently, gold prices gradually stabilized and reached a record high of $2,075 per ounce during the 2020 pandemic.

Similarly, China's A-shares also plummeted 7% on April 7 last year due to US-China trade tensions, but the market subsequently rebounded and launched a bull market, with the Shanghai Composite rising over 1,000 points. Investors who cut positions on April 7 probably wish they could slap their own legs.

As for bitcoin, needless to say, countless historical cases have proven that bitcoin crashes are opportunities to bottom-fish, and the market will continue to rise long-term. In 2018, bitcoin prices plummeted from near the $20,000 high to around $3,000, a decline exceeding 85%. Many people thought bitcoin had reached its end. However, in 2020, bitcoin prices began rising sharply, reaching a record high exceeding $60,000 in 2021. In 2022, bitcoin experienced another crash, falling from above $40,000 to below $15,000. But subsequently, bitcoin prices gradually recovered, reaching a peak of $126,000 in 2025.

🙋One sentence to summarize: For quality assets, "black swans" are "lucky birds" that let you bottom-fish and make money. Don't sell in panic; confidence is more valuable than gold!

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

✅If you're holding a full position, I'd recommend you close your account for now and do something relaxing, then check your account in a couple of days. You might discover your assets have returned to their original state. Market bears come from nowhere and return to nowhere; there's no need to make yourself tense and depressed for two days for nothing. After all, the most important thing in life is happiness! 😊😊😊
✅If you're currently in cash, you can start building positions gradually. Pay attention to these levels:

Gold: Watch the 4,000 round number level, enter your initial position above 4,000, add on a break below 4,000, stop loss below 3,800

Silver: Follow gold trends closely, if it drops to 50+, enter your initial position. Add on a gold break below 4,000, stop loss below 50 dollars

BTC: Enter initial position at market price, add on a break below 67,500, stop loss at break of 67,000

ETH: Enter initial position at market price, add on a break below 2,021, stop loss at break of 2,000

💡Meanwhile, when bottom-fishing, also note these tips:

1. Stick with quality assets: The core of long-term investing

During market crashes, stocks of quality companies are often wrongly sold off. These enterprises boast strong profitability, solid financial conditions, and broad development prospects, maintaining stable operating performance even during market downturns. Investors should hold these quality assets and patiently await market rebounds.
Regarding assets like gold and bitcoin, investors should also approach from a long-term perspective, not being misled by short-term price fluctuations. Gold, as a scarce resource, possesses preservation and appreciation functions; bitcoin, as an emerging digital asset, has considerable investment potential. As long as investors can tolerate short-term price volatility, long-term holding often yields solid returns.

2. Appropriately diversify investments

Don't invest all funds into a single asset, but appropriately diversify across different asset classes, such as stocks, bonds, gold, and bitcoin. This way, when one asset class declines, others may perform well, offsetting some losses.

3. Control positions: Flexibly respond to market changes

During periods of market uncertainty, controlling positions is extremely important. Investors shouldn't operate at full capacity, but should retain certain cash reserves to timely enter when better investment opportunities appear.
Meanwhile, investors should timely adjust positions based on market changes. When markets show sufficient rebounds, appropriately take profits; when markets decline again, promptly build positions and buy on dips.

Alright, having said so much, everyone, bottom-fish with this cup of chicken soup! Wishing everyone prosperity every day! 💰💰💰