Having been in the crypto industry for many years, I habitually analyze the linkage of various assets in the global macro markets to infer signals about industry development. Recently, have you noticed that the precious metals market is performing strangely, the US stock market is showing unusual patterns, and the altcoin market has fallen into collective silence? At first glance, these seem like three separate issues, but in reality, they are driven by just two underlying factors—liquidity and macroeconomic indicators. Concepts like silver demand, central bank gold purchases, and real interest rates, once understood thoroughly, make it possible to see the cross-market asset fluctuations very clearly. Today, I want to break down these logics from a practitioner's perspective.

The precious metals market has always been a barometer of the economy. Although gold and silver are both precious metals, they are driven by completely different forces due to their distinct characteristics.

Let's start with silver. Silver is quite special, possessing both commodity and financial attributes. Its demand is supported mainly by two sectors—jewelry and industrial applications. In jewelry, silver excels because of its affordability and design flexibility, maintaining a stable share in the global jewelry market. In recent years, emerging markets have seen a clear upgrade in consumption, with demand for silver jewelry continuing to grow; industrial demand is the real growth driver. From photovoltaics and electronics to medical devices, the throughput of silver in industry has been increasing year after year. Therefore, the fundamental support for silver comes from the combined effects of these two demand sectors.

Gold is different. It is more of a financial asset, and its price fluctuations are most influenced by central bank attitudes. Central banks worldwide have been steadily increasing their gold reserves, reflecting concerns over the credibility of fiat currencies. When geopolitical tensions or market liquidity issues arise, central banks tend to buy gold more actively. This consensus among central banks, in turn, provides strong support for gold prices.

At this point, we can understand why altcoins are so quiet now. During periods of tightening global liquidity, funds are first withdrawn from risk assets. As a safe haven asset, precious metals tend to attract more capital. Only when real interest rates decline and central bank policies shift will liquidity flow back into altcoins. This is the underlying logic of cross-market asset allocation.