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According to SMM data, as of August 18, the average price of domestic polysilicon dense and recharge material stood at RMB 40.5/kg, representing a 26.96% increase from July 31. Some leading producers were quoting as high as RMB 43/kg to external buyers.

August 21, 2026 After the fourth part of this series examined the monetary policy dilemma facing the Federal Reserve , Part 5 today focuses on a factor that makes the Fed’s dilemma so pressing in the first place: the steadily rising public debt in Western countries, particularly in the United States. The $40 Trillion Mark Is Drawing Near According to current data, U.S. national debt stands at around $39.6 to $39.7 trillion, representing approximately 123 percent of annual economic output. By comparison, at the end of 2024, the debt level was still “only” around $35.25 trillion. Within just a few years, U.S. national debt has thus risen significantly once again from an already exorbitantly high level, and given the ongoing accumulation of new debt, reaching the 40-trillion-dollar milestone is only a matter of time. It will be reached and surpassed in just a few weeks. For the current fiscal year 2025/2026, the Congressional Budget Office estimates the budget deficit at around 5.8 percent of economic output. This is an unusually high figure for a period without an acute recession. Western nations should actually be striving to reduce debt during good or at least stable times in order to create a buffer should higher new borrowing become necessary during an economic downturn to stimulate the economy. Rising Debt Exacerbates the Interest Burden The fundamental problem can be illustrated with a simple rough calculation: If both the debt burden and the general interest rate level rise, the annual interest burden grows disproportionately. Whereas a government previously had to pay a certain amount in interest when debt levels and interest rates were lower, the same level of debt at higher interest rates now requires many times that amount in annual interest payments. This growing interest burden increasingly competes with other budget items such as defense, social benefits, or infrastructure and noticeably restricts the fiscal maneuvering room of current and future governments. Or to put it another way: Today, we are paying the price for the high levels of debt that were recklessly incurred during the era of cheap money with low—and in some cases negative—interest rates. This dynamic is not limited to the United States. In Europe and Asia as well, debt levels are rising steadily in many countries, albeit from different starting points. However, the fundamental policy challenge of managing growing debt amid a structurally higher interest rate environment affects a large portion of developed economies and is not a purely American phenomenon. The Connection to Gold: The Question of Sustainability In light of these figures, investors are increasingly asking themselves about the long-term sustainability of high government debt. If a debt level is no longer perceived as sustainable, a government essentially has only a few options: higher taxes, spending cuts, a debt haircut, or a creeping devaluation of the debt through higher inflation over the long term. Historically, the last option in particular—so-called financial repression via negative real interest rates and higher inflation—has been the least politically unpopular way out of a situation of excessive debt. It therefore stands to reason that governments and central banks will once again pursue this “political silver bullet” for debt reduction. Gold has survived every debt haircut and sovereign default Gold is traditionally regarded in this context as a hedge against precisely this scenario: It is not subject to any counterparty obligation, cannot be devalued by any government through money printing, and has historically proven itself as a store of value over very long periods. The more market participants assess the likelihood of an inflationary solution to the debt problem as rising, the more attractive it becomes for them to hedge their assets with gold. This motivation to buy gold and hold it over the long term is entirely independent of short-term interest rates or economic conditions. Institutional investors and central banks are also likely to incorporate this consideration into their long-term portfolio strategy, as described in Part 3 of this series . Added to this is a psychological effect that is particularly significant for retail investors: The more frequently round and symbolically charged debt milestones—such as the $40 trillion threshold—are discussed in the media, the more the issue of long-term debt sustainability comes to the forefront for private investors as well. When the Masses Turn Their Attention to Gold If they, too, become active, the gold market could quickly become tight, because even if each individual buys only a very small amount of gold, massive demand can still develop very easily and quickly due to sheer volume. As very few investors realize, this demand meets a relatively tight market. This, too, is a structural and often underestimated factor that points to significantly higher gold prices in the future, because compared to the bond and stock markets, the global gold market is small and of limited size. If investors shift their capital en masse—even just slightly—it can very easily create enormous leverage effects. We will examine this aspect of gold demand—one that many overlook—in the sixth part of this series. Source： https://goldinvest.de/en/usd40-trillion-in-u-s-debt-the-driver-behind-the-next-gold-boom