On Tuesday, New York gold surged to a historic high of $3509.90 per ounce, but then fell back due to profit taking. On Wednesday (April 23) in the Asian market, COMEX gold fluctuated in the 3316-3396 range and is currently trading around $3353.50 per ounce. Axel Merk, President and Chief Investment Officer of Merk Investments and Portfolio Manager of ASA Gold and Precious Metals Fund, stated that these market performances may indicate a deeper structural shift in the global financial order.

Merk said, "I sometimes refer to gold as the most direct indicator of our policymakers' fanaticism, but what has changed is that tariffs are disrupting capital flows

Merk compares the financial structure of the United States to hedge funds, where both foreign and domestic participants borrow US dollars to invest overseas. He said, "When you disrupt trade flows, capital flows will be affected, which means that the amount of capital flowing back will decrease... This means that future deficits will have to rely more on domestic financing

Central banks around the world have been aggressively purchasing gold, and when asked if this is a story of de dollarization, Merck said, "Yes, at the margin, future allocations may be different, and gold is one of the beneficiaries

The International Monetary Fund (IMF) currently predicts global economic growth to be only 2.8%, the lowest level since the pandemic, and US Treasury yields to rise above 4.37%. Merk warns, "The cost of doing business is rising, and operating costs around the world are becoming more expensive

President Trump recently publicly attacked Federal Reserve Chairman Powell, calling him "Mr. Too Late" and "Big Loser," exacerbating market volatility. Merk warned, "If they cut interest rates, people may say it's due to pressure." He added, "If there really is real intervention, not just verbal intervention, we will see it in long-term inflation expectations. We haven't seen it yet

Merk stated that investors should closely monitor who will succeed Powell at the end of his term in 2026. He said, "This decision will tell the market how much pressure Trump is under," referring to speculation about potential successor Kevin Warsh. To some extent, if he were the next chairman of the Federal Reserve, I believe the independence of the Fed would be preserved

But he believes that the risk is still significant. He said, "The real fundamental risk is the change in the financial system's pipeline, and the borrowing costs in the United States will rise for a long time

As for gold, Merk said, "We haven't seen any retail frenzy yet... in this sense, nothing unusual has happened." He emphasized, "In the global financial market, the liquidity of gold is not that strong. Therefore, if there is capital pouring into gold, you will see drastic fluctuations... I think this volatility may further intensify

Although Merk refused to disclose the names of individual stocks, he stated that ASA has positions in junior gold mining companies. They haven't actually mined anything yet, that is to say, because they have this implicit leverage... you often see disproportionate returns

When asked what kind of investment portfolio is reliable in this new era, he suggested, "A portfolio that you can sleep in at night, if you feel uncomfortable with volatility, means your exposure to risky assets is too high

For Merk, gold remains a strategic allocation. He said, "My personal risk tolerance includes a large amount of gold and gold mining, but I will not impose this on others