On Tuesday, New York gold surged to a record high of 3509.90 USD per ounce, before retreating due to profit-taking. On Wednesday (April 23), COMEX gold traded in the range of 3316-3396 THB, currently trading around 3353.50 THB/ounce. Axel Merk, President and Chief Investment Officer of Merk Investments and Portfolio Manager for the ASA Gold and Precious Metals Fund, suggested that these market movements might indicate deeper structural shifts in the global financial order. "I sometimes call gold the most direct indicator of our policymakers' fervor," Merk said, adding, "What has changed is tariffs are disrupting flows."

Merk compared the US financial structure to a hedge fund where both foreign and domestic participants borrow dollars to invest overseas. "When you disrupt trade flows, you affect capital flows, meaning less money coming back... This means future deficits will have to be financed more domestically."

Central banks have been aggressively buying gold. When asked if this was part of a de-dollarization trend, Merk responded affirmatively: "Yes, at the margin, future allocations may look different, with gold being one of the beneficiaries."

The International Monetary Fund (IMF) forecasts global economic growth at just 2.8%, the lowest since the pandemic, while US Treasury yields rose above 4.37%. Merk warned, "The cost of doing business is rising, making the world more expensive to operate."

President Trump's recent public attacks on Federal Reserve Chairman Jerome Powell, calling him "Mr. Too Late" and "Big Loser," have exacerbated market volatility. Merk cautioned, "If they cut rates, people might say it's due to pressure." He added, "If there is genuine intervention, not just rhetoric, we'll see that in long-term inflation expectations. We haven't seen that yet."

Merk advised investors to closely watch who replaces Powell when his term ends in 2026. "This decision will tell us how much pressure Trump is under," he said, referring to speculation about potential successor Kevin Warsh. "To some extent, if he becomes the next Fed Chair, I think Fed independence will be preserved."

However, risks remain significant. "The real fundamental risk is changes in the plumbing of the financial system, with US borrowing costs set to rise for an extended period."

Regarding gold, Merk noted, "We haven't seen any retail frenzy... In that sense, nothing unusual is happening." He emphasized, "Gold is not very liquid in the global markets. So, if money rushes into gold, you'll see violent swings... I think those swings could get even more pronounced."

Although Merk declined to name specific stocks, he mentioned ASA has positions in junior mining companies. "They haven't mined anything yet, but because of this implicit leverage... you tend to see disproportionate returns."

Asked about what kind of portfolio makes sense in this new era, he suggested, "A portfolio you can sleep at night with. If volatility makes you uncomfortable, that means you have too much exposure to risky assets."

For Merk, gold remains a strategic allocation. "Personally, my risk tolerance includes substantial amounts of gold and gold mining, but I wouldn't impose that on anyone else."