Hong Hao's latest conversation: A-shares will dip first and then rise, and gold could double again in the future without any problem

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Source: Looking at the World Under the Banyan Tree

In April 2026, as global capital markets are shrouded in the smoke of conflict around the Strait of Hormuz, and as gold plunges more than 15% from its $5,600 peak, and as China A-shares repeatedly struggle around the 3,800-point threshold.

Hong Hao, Chief Investment Officer of Lianhua Asset, in a recent interview, laid out a set of judgments for the market to chew on again and again.

“Go down first, then up.” When asked how A-shares might evolve next, Hong Hao gave a concise four-character answer. When he was later pressed on, “Will it fall below 3,800 points?”, he said plainly: “Most likely—then it will go up again.”

As for gold, his view was even bolder: “I think doubling again is no problem.” But he added right away: “Yet whether it can complete that this year? Uncertain.”

These two sets of judgments may seem contradictory, but in fact they point to the same underlying logic: at the top of this once-in-35-years supercycle, the anchor of asset pricing is switching from “the U.S. dollar” to “gold,” and China’s assets’ independent storyline amid global turmoil has only just begun.

Hong Hao said that gold doubling again is no problem. But what he didn’t mean was “rush in right now.” When gold was at $5,000, he recommended “accumulate gold, don’t trade it.” When gold was at $5,600, he warned “leverage detonates.”

The key to understanding gold isn’t predicting the price—it’s understanding what role it plays in your portfolio.

1. Gold: a return from “the king of safe havens” to “a credit anchor” 1.1 Mean reversion beyond the 5–6x variance

When gold fell from $5,600 to around $4,100, the market was in panic. But Hong Hao’s assessment was unusually calm: “Even though it has dropped this much, according to the data model, its annualized return is still at the very top of history—about 5 to 6 times the variance outside the range.”

This passage captures the special nature of this gold cycle. What does 5–6x variance mean? It means the magnitude of this rally has already far exceeded the normal fluctuation range in statistical terms.

But Hong Hao emphasized that mean reversion is a statistical law: “There’s no way around it; it has to revert to the mean.”

“At this point, does everyone think that because prices are falling, the story is over? Absolutely not.” Hong Hao said decisively, “Gold’s story has been told for 5,000 years—it will go on for another 5,000 years.”

This is a natural extension of the “gold creates a valuation anchor” framework he proposed in a January 2026 interview with the Shanghai Securities News. At that time, he stated clearly: “Under a new credit system, gold may become the anchor for the valuation of all assets.”

The core of this judgment is that as market concerns about the U.S. dollar credit system gradually emerge, market psychology is reverting to a logic centered on the gold standard.

1.2 The special nature of this pullback

But why would gold fall at the moment when it’s needed most as a hedge? Hong Hao’s breakdown was extremely thorough.

The first reason is leverage blow-up. “During the period when gold and silver are rising, because of the use of leverage, it accelerates the upward surge in prices.” When prices reach the end of a parabolic-style rally, the leveraged funds stampede collectively—naturally triggering a sharp pullback. The second reason is the peak of public attention. “As prices rise, people pay more attention to it, which causes more and more mainstream funds to join. It’s just like trading stocks—when everyone charges in together, it’s basically at the top.” The third reason is most critical: a temporary contraction in U.S. dollar liquidity. Hong Hao pointed out that after the outbreak of war, the dollar exchange rate surged, showing that demand for the dollar far exceeded supply.

For emerging countries holding large amounts of dollar-denominated debt, when investors sell their emerging-market currencies to switch into dollars to escape, central banks are forced to sell gold to buy dollars to protect the exchange rate.

“Then when ordinary people look at it, they see the central bank that was stockpiling gold is now selling gold—so everyone sells as well.” Hong Hao described the complete chain of this “stampede.”

But this logic precisely confirms Hong Hao’s long-term view: “As a natural counterparty to the dollar, gold’s function won’t disappear.” Once volatility is smoothed out, gold will return to playing this role.

The paradox of gold is this: when everyone is talking about it, it isn’t a safe-haven asset. Leverage, crowding, central bank selling—these “human” factors obscure gold’s deepest underlying logic: it is the opposite side of dollar credit. Once liquidity panic passes, this logic will step back up to reprice the market.

1.3 Validation from overseas investment banks

Hong Hao’s view is in sync with analysis from multiple overseas investment banks.

In a research report released on March 31, 2026, Goldman Sachs maintained its bullish view on gold, expecting the gold price to reach $5,400 per ounce by the end of 2026. Supporting factors include ongoing central bank gold purchases and expectations for two U.S. rate cuts this year. Goldman Sachs also noted that if private-sector allocation accelerates, there is a significant upside risk.

UBS Global Wealth Management was even more optimistic, expecting 2026 gold prices to rise to between $5,900 and $6,200 per ounce. The core logic includes U.S. fiscal risks, geopolitical tensions, and a structural shift in the global monetary system. “De-dollarization” trends and central bank reserve diversification were listed as long-term structural supports.

These institutions’ judgments align completely in direction with Hong Hao’s forward-looking view that “doubling gold again is no problem.”

2. A-shares: go down first, then up—3,800 points is the “crouching” position 2.1 A three-layer logic of “go down first, then up”

When asked about the next evolution of A-shares, Hong Hao’s judgment was concise and forceful: “Go down first, then up.”

When he was then asked, “Will it fall below 3,800 points?”, he said directly: “Most likely—then it will go up again.”

This judgment is built on his macro-cycle framework. Hong Hao positioned 2026 as the “top of the 35-year long-cycle,” with very large volatility: “geopolitics, the cycle, and liquidity resonating together—risks and opportunities coexist.” Within this framework, any round of market adjustment is not the endpoint, but a buildup phase within a larger-scale market cycle.

The first factor supporting “going down” is that geopolitical uncertainty has not been fully priced in. Hong Hao had stated clearly in early March that the market has not yet sufficiently accounted for the risk premium from geopolitical uncertainty, and only when a turning point in the Iran war appears will things be settled. The second factor is the transmission of a peak in the U.S. stock AI cycle. Hong Hao’s quantitative model shows that the U.S. semiconductor short-cycle of 3–4 years is gradually topping out, which will weigh on global tech stock valuations. The third factor is a phase-based contraction in liquidity. Hong Hao’s constructed global liquidity indicator shows that liquidity has reached a regional high and is about to top out and roll over, creating near-term pressure on risk assets.

But the underlying logic supporting “going up again” is also solid. A-shares are in a relatively better situation due to yuan appreciation and policy support. With domestic policy easing, expectations for the two sessions, and PPI stabilizing, A-shares are already in a bottom-region, with limited downside room.

2.2 3,700–3,800: the consensus bottom among institutions

Hong Hao’s judgment that it will “most likely break below 3,800 points” strongly matches the consensus of domestic institutional investors.

According to a domestic institutional investor survey released on April 2, more than 260 fund managers from over 140 core investment institutions participated. The survey shows that institutions generally believe that the Shanghai Composite’s 3,700–3,800-point range is the bottom area of this cycle.

But the survey also reveals a key detail: the willingness to add positions is not strong. Relative returns (public funds) average equity exposure of 76.9%, while absolute returns (private funds) are only 53.1%. This indicates institutions are not bearish, but they also don’t dare to move recklessly—everyone is watching, waiting for clearer signals.

Mainstream expectations among institutions for full-year returns are in the 5% to 10% range, and for domestic economic growth this year most give a “neutral” view. This means the market is clear-eyed: geopolitical conflicts and soaring oil prices are short-term shocks and won’t flip over the whole table.

Institutions say 3,700–3,800 is the bottom, but their willingness to add exposure isn’t strong. This is not a contradiction—it’s a “classic moment” at the bottom. Everyone knows this is the bottom area, but nobody wants to be the first cannon fodder to rush in. This is exactly the most torturous part of Hong Hao’s “go down first, then up” in the here-and-now: knowing it will rise later, but whoever hurts from the decline right now.

2.3 Overseas investment banks unanimously bullish

On the overall view of A-shares, the outlook from overseas investment banks is highly consistent with Hong Hao’s framework.

On March 31, Liu Jinzhen, Goldman Sachs’ Chief China Equities Strategy Analyst, released his latest view, saying he still maintains the strategy to increase holdings of A-shares and H-shares. He expects that in 2026, overall profit growth for A-shares and H-shares could reach around 10%, supported jointly by factors such as AI, “going global,” and “anti-overcrowding/anti-involution” policy measures.

Morgan Stanley defines 2026 as a “year of stabilization,” where there is limited upside room for index gains but valuations stabilize within a higher range. The firm slightly raised its target for the China stock index, setting the Dec 2026 target for the CSI 300 Index at 4,840 points.

Goldman Sachs’ earlier forecasts show that A-share companies’ earnings growth will rise sharply from 4% in 2025 to 14% in 2026 and 2027, mainly driven by three specific factors: AI, “going global,” and “anti-overcrowding/anti-involution.”

These overseas institutions’ judgments are completely consistent with Hong Hao’s “go down first, then up” pacing in direction—pressure in the short term, but bullish in the medium to long term.

3. Allocation framework: “Hold it to let it prosper”—find certainty amid volatility

3.1 Strategy shift from offense to defense

Hong Hao summarizes the 2026 investment themes as four characters: “Hold it to let it prosper.” At the top of the 35-year cycle, when you’ve seen enough, shift from offense to defense.

Specifically, he suggests reducing exposure to growth (AI, semiconductors, etc.), and shifting to value defense (banks, high-dividend stocks, utilities); allocating to gold + government bonds to hedge volatility and geopolitical risk; industrial metals (copper, aluminum) still have upside potential; and agricultural products can be laid out in advance.

The core of this framework is: don’t try to “bet big” at the cycle top, but instead build a portfolio that can survive through volatility.

3.2 The rotation of commodities and gold’s long-term value

Hong Hao points out that the upward storyline of commodity cycles often follows a transmission sequence of “precious metals → base/non-ferrous metals → energy.” As long as the gold price remains stable within a reasonable range and does not experience a major pullback, there is still a clear demand for catch-up gains and room across related commodities.

Regarding gold’s long-term allocation value, Hong Hao’s view has been consistent. He believes gold should be the ballast stone of an investment portfolio, allocated at 5% to 10% as a hedge. This is not “trading gold”—it’s “stockpiling gold.” “Accumulate gold, don’t trade it” is the correct way to ride out the cycle.

3.3 Divergence between A-shares and Hong Kong stocks

In choosing between specific markets, Hong Hao is more optimistic about A-shares. The downtrend in Hong Kong stocks has not ended; he would not participate in the rebound, waiting for signals that the cycle has bottomed out. A-shares, benefiting from yuan appreciation and policy support, are in a relatively better position.

This is highly consistent with the results of the domestic institutional investor survey: 74% think it will be difficult for Hong Kong stocks to outperform A-shares this year, and 70% say they do not plan to increase their allocation to Hong Kong stocks for now.

Building in the “down” to position for “up again”

In April 2026, when gold is hovering around $4,100 and A-shares are repeatedly struggling around the 3,800-point threshold, Hong Hao’s judgment provides investors with a clear coordinate system.

Gold’s story isn’t over. Even after a 15% pullback, Hong Hao still believes “doubling again is no problem.” This optimism is not based on short-term events, but on underlying judgments about the U.S. dollar credit system, the global de-dollarization trend, and gold as a “5,000-year credit anchor.”

A-shares’ adjustment is not the endpoint. At the top of the 35-year cycle, “go down first, then up” is the most likely path. Overseas investment banks are broadly positive about the medium-to-long-term value of China assets; domestic institutions confirm the bottom consensus at 3,700–3,800; and during the “down” phase, that’s precisely the “buildup” for the “up again.”

As Hong Hao put it: “Where there is volatility, there is opportunity. If you don’t change the ways of thinking you’ve used before, don’t change your investing habits, and don’t update your understanding of the world, it’s hard to spot the real opportunities.”

“Accumulate gold, don’t trade it” doesn’t mean standing still—it means knowing why you hold it. Waiting for “up again” isn’t taking a beating passively; it’s using discipline and a framework to hold onto your own chips during the “go down first” phase.

When the smoke of conflict clears and volatility is smoothed out, those who kept building positions during the “down” phase will ultimately receive the returns that belong to them during the “up again” phase.

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责任编辑：Yang Ci