Complete victory over US Treasuries, Japanese Yen, and Swiss Franc! Gold is the only trusted safe haven in the market this year

As traditional safe-haven assets fade, gold is proving to the world what the true "ultimate safe haven" is with a 30% year-to-date increase.

From 2025 to now, the spot gold price has surged by 30%, currently trading around $3,390.09, having briefly surpassed the $3,500 mark in April. This performance makes other traditional safe-haven assets look pale in comparison: the US dollar index has fallen nearly 10% this year, while the Japanese yen and Swiss franc have appreciated against the dollar by 8% and 10%, respectively, but their gains are far less than that of gold. Even the yield on the US 10-year Treasury bond has only decreased by 19 basis points.

At the recent annual Asia-Pacific Precious Metals Conference held in Singapore, Nikos Kavalis, Managing Director of Metals Focus, analyzed the core advantages of gold:

"The key advantage of gold is that it is not a liability of anyone. When investors hold US Treasuries, other sovereign bonds, or even currencies, they are essentially betting on the respective economies."

Analysis suggests that gold is not affected by any government credit or policy fluctuations, possesses intrinsic value, and has no counterparty risk. Additionally, the continued large-scale accumulation by global central banks further solidifies its position as a pure value storage tool.

The Myth of US Treasuries Shattered, Trump's Policies Trigger a Crisis of Trust

Once a bastion of financial security, the US dollar and US Treasuries are now showing cracks. Since April 2, US Treasuries have faced significant sell-offs. In May, Moody's downgraded the US credit rating, and the impact of Trump's tax legislation further undermined the long-term reputation of US Treasuries as a safe-haven asset, intensifying investor concerns over fiscal discipline. The yield on the 30-year US Treasury bond has surpassed the critical 5% level, currently at 4.94%.

Shaokai Fan, Head of Global Central Banking at the World Gold Council, stated:

"People are increasingly uncertain about what the future of the US dollar and US Treasury markets will look like. I believe this has sparked greater interest in alternative safe-haven assets like gold."

Although demand for US Treasuries has slightly recovered since then, the volatility of policy-making in the world's largest economy has already damaged investor confidence in US assets.

The Japanese Yen and Swiss Franc Also Fade: Interest Rate Differentials Are a Fatal Blow

The performance of other traditional safe-haven assets is equally disappointing. In May, as US Treasuries plummeted, investors were also selling Japanese government bonds. The yield on Japan's 10-year government bonds has risen by 39 basis points since the beginning of 2025, currently at 1.473%, indicating a decline in demand.

Fan explained that the weakness of the yen is partly attributed to interest rate differentials:

"Due to the Bank of Japan's rate hikes being less aggressive than those of other central banks, the interest rate differential has become a 'deterrent' for investors turning to the yen."

In the face of the shadow cast over economic prospects by Trump's tariff policies, Wall Street Journal mentioned on the 17th that the Bank of Japan has held its position for the third consecutive time, putting the brakes on its balance sheet reduction pace.

As for the Swiss franc, despite appreciating over 10% against the dollar this year, the Swiss National Bank seems to be trying to prevent safe-haven funds from flowing in. In March, the Swiss National Bank set the policy rate at 0.25%. In May, Swiss consumer prices fell for the first time in over four years, raising predictions of potential negative interest rates at the upcoming policy meeting. As of the time of writing, the USD/CHF exchange rate is at 0.8125.

Bart Melek, head of commodity strategy at TD Securities, candidly stated:

"The Swiss franc remains attractive, but the question is if Switzerland implements negative interest rates now, how much return will I get if I buy Swiss francs?"

Unique Advantage of Gold: Pure Safe Haven Without Government Burden

As safe-haven assets issued by various governments fail, the reasons for gold's emergence are evident.

Fan summarized that gold stands out because it is a large liquidity market and it is non-political:

"All other assets are issued by governments. Gold is not a fiat currency, and its supply is naturally limited; I think this is why it stands out as a safe-haven asset. It is not linked to any specific political risk."

Nicholas Frappell, global head of market at ABC Refinery, added:

"Gold as an asset is not affected by the high debt-to-GDP ratios of other currencies."

He pointed out that although the fixed income market has sounded the alarm over uncontrolled debt growth, the fiscal stance taken by the U.S. and other countries remains accommodative.

Unlike sovereign bonds or fiat currencies, gold does not carry counterparty risk. Melek stated:

"Gold has intrinsic value. This means I do not have to rely on the government or private agents to fulfill debt obligations to pay interest."

The massive purchases of gold by global central banks have also enhanced its appeal as a safe haven. In 2024, central banks net added 1,044.6 tons of gold, marking the third consecutive year that purchases exceeded the 1,000-ton threshold. The European Central Bank recently reported that by the end of 2024, gold has surpassed the euro to become the second-largest reserve asset, accounting for about 20% of global reserves In this era full of uncertainty, gold is proving to the world that a true safe haven is not any government's promise, but this ancient and pure store of value