Hello, my friends!

It likely comes as no surprise that the week’s most eagerly anticipated data was generated by yet another inflation gauge: the personal consumption expenditures (PCE) price index, known to be the Federal Reserve’s preferred measure of inflation because of how (relatively) well it accounts for changes in consumer behavior.

On Friday, the Commerce Department revealed the PCE numbers for July, which showed that while inflation remains well moderated from the near-10% levels at which it sat three years ago, price pressures may be reenergizing because of President Trump’s aggressive tariff policy.

According to the government’s report, the headline, or all-items, PCE index climbed at an annual rate of 2.6%, equal to the pace set in June; as for the core index, which strips out volatility-prone food and energy prices, that accelerated 0.1 percentage point to land at 2.9%…the fastest rate for core PCE since February.

For now, the prospect of a tariff-induced inflation spike doesn’t seem to be much of a cause for concern on Wall Street. Markets were relatively unmoved by Friday’s numbers and closed out August solidly higher from where they started: the Dow Jones Industrial Average surged 3% higher for the month, while the S&P 500 and tech-heavy Nasdaq Composite rose 2% and 1.6%, respectively.

Expectations for an interest rate cut in September weren’t dimmed by the inflation figures, either, with traders still seeing a 90% chance the Federal Reserve resumes rate reductions next month.

In other news of note this week:

Durable Goods Orders Rise…and Fall…in July

The Commerce Department reported on Tuesday that orders for durable goods – products made to have an average life of three years – fell 2.8% in July, due largely to weak sales of commercial aircraft; new orders for planes…primarily from Boeing…tumbled a whopping 32.7% last month.

But a closer look at the numbers reveals that the current state of product orders, overall, may not be as unfortunate as the headline metric suggests.

For one thing, that near-3% decline is better than the 4% drop economists had expected, and much improved over the 9.4% drop recorded in June.

Beyond that, a look at last month’s activity sans notoriously volatile sectors reveals durable goods orders actually grew at a solid pace in July.

For example, durable goods order ex. transportation climbed 1.1% last month. And so-called core capital goods orders, which exclude both transportation and defense, also surged a relatively robust 1.1%. That’s a big turnaround from June, which saw orders for core capital goods tumble 0.6%.

Indeed, some observers view July’s growth in core capital goods orders…considered a proxy for business investment in equipment…to be evidence that companies could be thriving in spite of tariff distress.

As Stephen Stanley, chief economist at Santander Capital Markets, said in a note:

“Despite overwhelming anecdotal commentary suggesting that many companies put their investment projects on hold as they sought to navigate the choppy waters caused by policy-related uncertainty, the data show that firms have in fact continued to invest at a reasonably healthy pace.”

Key Regional Data Underscores Pervasive U.S. Manufacturing Weakness  

Also making news this week were a couple of key regional gauges of U.S. economic health, both of which underscored the manufacturing-sector weakness which has been evident in national gauges such as those from S&P Global and the Institute for Supply Management.  

On Monday, the Federal Reserve Bank of Dallas reported that the index derived from its Texas Manufacturing Outlook Survey – a monthly assessment of factory activity in the Lone Star state – fell back into contraction this month after landing in expansion territory last month for the first time all year.

According to the Dallas Fed, the survey’s index for general business activity declined to -1.8 in August from 0.9 in July. Readings below zero imply contraction in the manufacturing sector, while those above zero imply that the sector is expanding.

Of particular note was the decline in the survey’s Production Index…a component measure of the broader metric…which tumbled nearly 30% this month. Noteworthy, as well, is the number of survey respondents who said they’d been negatively impacted by tariffs this year: roughly 70%.

“Tariffs and the continuous contradictory, knee-jerk announcements that are a complete change in governmental/regulatory policy [are issues of concern],” said one manufacturer, while another made this ominous declaration:

“We are probably going out of business within 90 days.”

The following day, Tuesday, the Richmond Fed chimed in with its update on manufacturing conditions in the Mid-Atlantic states, noting that activity in August continued to reflect the persistent weakness which has been characteristic of the region for months.

According to the report, the composite index derived from what’s known as the Fifth District Survey of Manufacturing Activity did rise 13 points in August. However, the metric remained squarely in negative territory because of how low it was the month before. The index landed at -20 in July, which is why August’s sizable point gain was able to push the gauge no higher than to -7 this month.

Unsurprisingly, all three of the overall measure’s component indexes followed the same pattern in August, rising substantially from July’s readings but nevertheless remaining in negative territory: The Shipments Index increased to -5 from -18; the New Orders Index rose to -6 from -25; and the Employment Index climbed to -11 from -16.    

Consumer Confidence Index Lands in “Pessimism” Territory for Sixth Consecutive Month

Finally this week, a widely followed gauge of consumer sentiment revealed little change in Americans’ uncertain outlook for the economy, more broadly, as well as for their own personal economic fortunes.

On Tuesday, The Conference Board reported that its proprietary Consumer Confidence Index (CCI) came in at a reading of 97.4 this month. Although that’s just modestly below the upwardly revised 98.7 posted in July, August marks the sixth straight month the index landed below the neutral reading of 100. CCI measures below 100 imply greater pessimism, overall, among Americans.

The story was largely the same with the Expectations Index, a component measure of the headline metric that evaluates consumers’ six-month outlook for the economy.

In August, the Expectations Index also saw a small decline, ticking down 1.2 points to 74.8. But while the magnitude of change was relatively slight, the reading marked another month in which the subindex landed below the critical level of 80, a threshold which implies recession could lie ahead.

Stephanie Guichard, senior economist at The Conference Board, said in a statement that concerns over the potential impacts of White House trade policy continue to weigh heavily among consumers, noting:

“Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices. Meanwhile, references to high prices and inflation, including food and groceries, rose again in August. Consumers’ average 12-month inflation expectations picked up after three consecutive months of easing and reached 6.2% in August—up from 5.7% in July but still below the April peak of 7.0%.”

Anxiety over the outlook for the labor market remains prominent among Americans, as well, with Guichard also emphasizing that “consumers’ appraisal of current job availability declined for the eighth consecutive month.”

Persistent pessimism in consumers’ view of the economy can be a key consideration of Fed policymakers who are weighing how to proceed with possible changes to interest rates. Some observers, like renowned investor Louis Navellier, believe the chronic pessimism which now characterizes consumer sentiment effectively demands that Fed policymakers resume rate reductions.

“It is imperative that the Fed cuts key interest rates and continues to cut in the upcoming months to bolster consumer sentiment and avoid a recession,” Navellier said recently.

That’s it for now; have a marvelous weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

As you likely know, gold reached a new intraday high last Friday, surpassing the previous high of $3,500 reached in April and topping out at $3,534 (continuous contract) per ounce.

The new high came on news that imports of gold bars would be subject to tariffs. Shortly thereafter, however, the White House characterized the report as “misinformation,” with President Trump confirming on Monday via Truth Social that “gold will not be tariffed.”

By Wednesday of this week, gold had retreated about $130 from its latest record high. But that means the metal nevertheless remains relatively close to its highest-ever price.

That resilience is worth a closer look. Since the beginning of 2022, the price of gold has climbed roughly 85%; since January of 2024, gold has achieved new all-time highs nearly 70 separate times…a remarkable record of achievement. But what makes it even more noteworthy is that gold’s powerful push higher in recent years has come amid circumstances universally considered to be adversarial to the metal’s success.

Among the most prominent of those circumstances is the sharp rise in interest rates during 2022 and 2023, as well as the persistence of those higher rates to this day.

Gold Couldn’t Be Contained by the Fastest Cycle of Rate Hikes in 40 Years  

Over a strikingly short span of time…from March 2022 through July 2023…the Federal Reserve raised the benchmark federal funds rate 11 times and by 525 basis points in its effort to rein in runaway price pressures. The explicit increase in nominal interest rates combined with the rates of inflation over this period resulted in an overall increase in real rates over this period, as well – an increase that has remained largely intact to this day.

Despite this increase, however, rate-sensitive gold has managed to rise significantly over the last three years, as I mentioned just a minute ago.

But this epic surge by gold has taken place in the company of not only the fastest nominal rate increase in four decades…but also the record-breaking momentum demonstrated recently by equities.

Record Stocks? Gold Has Outperformed All Major U.S. Indexes So Far in 2025

Typically, periods that see risk assets characterized by great strength are oftentimes hostile to gold. There’s no great mystery as to why; when investors are confident in the near-term growth potential of the economy and financial markets, risk-off assets such as gold tend to fall in disfavor.

Yet during this most recent wave of strength among equities, gold has managed to remain exceptionally resilient, largely holding on to all of the gains it’s made during this metals bull market even as it has been outperformed by the three major U.S. indexes over the past few months.

Indeed, despite a recent surge that has seen the S&P 500 and Nasdaq Composite achieve new all-time highs, gold’s 28% rise since the beginning of January still far outdistances the increases logged so far this year by the S&P and Nasdaq as well as the Dow Jones Industrial Average.

So, what gives? How has gold managed to keep its strength despite the onslaught of rate- and market-based Kryptonite?

Uncertainty: The Biggest and Baddest Influence Over Gold Right Now

Simple. In a nutshell, the impact of traditional gold headwinds like higher rates and surging markets is being more than offset by a traditional gold tailwind that’s blown with great strength over the last several years: substantial economic, fiscal and geopolitical uncertainty.

It’s an uncertainty fueled by a multitude of drivers, including:

• an ever-worsening U.S. fiscal trajectory;
• ongoing deglobalization trends expected to generate an array of consequences, including higher structural inflation on a global scale and a lasting uptick in international tensions;
• America’s continued and aggressive use of dollar-based economic sanctions;
• continued related efforts at de-dollarization by many of the world’s central banks;
• and an anticipated increase in social and political unrest around the world.

The list could be a good deal longer – but you get the picture.

It’s not really the case, then, that there’s been a paradigm shift in the way gold reacts to higher rates and robust markets; those conditions always will tend to act as hinderances to gold. But remember that gold is subject to being moved in one direction or another by multiple influences. Each of the headwinds and tailwinds discussed here is every bit as relevant to gold today as it’s ever been. It’s just that comprehensive and multifaceted uncertainty has proved to be such an acutely strong driver of gold in recent years that the metal’s properties as a safe–haven asset have been more vigorously energized than its properties as a monetary asset (such as rate sensitivity).

The safe-haven properties of gold that have provided the metal with so much energy are expected to remain highly optimized as worrisome uncertainty continues to be a central feature of the global order. Should that projection, in fact, be realized, the investment terrain is likely to remain fertile for gold through at least the foreseeable future.  

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Despite concerns that tariff distress might have a lasting impact on the appeal of U.S. exceptionalism, the stock market has powered its way to new all-time highs in recent weeks while the CBOE Volatility Index hovers not far above its 52-week low.

And yet, even as risk assets are putting on a hell of a show, gold – perhaps the ultimate risk-off asset – remains as resilient as ever, reaching another new all-time high (intraday) of $3,534 on Friday.

That gold and equities are at or near their respective record levels at the same time says a great deal about the uniqueness of the current investment environment, one that appears to be characterized by nearly equal parts optimism and caution.

Among the most cautious investors, it seems, are the world’s central banks, which have acquired gold at or near record demand levels since 2022. Central banks have been buying so much gold, in fact, that it’s now the second-largest reserve asset.

Especially revealing are the most prominent reasons why central banks are buying all this gold. According to the World Gold Council’s 2025 Central Bank Gold Reserves Survey, the institutions said that “gold’s performance during times of crisis” is the most relevant factor in their decision to hold the metal. Similarly, during the assembly of its 2025 Global Sovereign Asset Management Study, investment management giant Invesco found that gold’s potential to serve as a “safe haven during financial instability” was the most important factor “to ongoing gold acquisition” by central banks.

And now it appears the world’s wealthiest individual investors are taking a page or two right out of central banks’ hedging playbook.

High-Net-Worth Investors Favor Less-Complex Gold as a Hedge; “Easier [for Them) to Get Their Head Around”

According to a recent report by HSBC, affluent investors raised their gold allocations by 120% over the past year. Edmund Shing, global chief investment officer at BNP Paribas Wealth Management, recently told CNBC that overseas family offices currently have allocations as high as 10% in physical gold or gold-backed investments.

For his part, Stephen Jury, a vice chairman of J.P. Morgan Private Bank, says he’s been seeing a significant increase in the number of U.S.–based high-net-worth clients who are eschewing more complex hedge strategies in favor of gold, telling CNBC investing in the metal is something that’s “easier [for them] to get their head around.”

High-net-worth investors both here and abroad not only are demonstrating their growing distrust of the prevailing global economic order by raising their allocations to gold; they’re demonstrating it, as well, by storing their metals in highly secure and geopolitically neutral strategic locations.

Remote Vaulting Popular Among Well-Heeled With a “Lower Trust in Government or Financial Systems”

“Our clients have lower trust in government or financial systems or are trying to build a backup or insurance plan by holding precious metals outside of the banking system in a neutral and safe country,” says Ludwig Karl, COO at Swiss Gold Safe, a company that provides specialty vaulting services in Switzerland and the Principality of Liechtenstein.

It’s worth noting that like their gold-buying counterparts at the world’s central banks, the high-net-worth investors now stockpiling gold aren’t purchasing it as a shorter-term “play” or in anticipation of prospective metals-favorable monetary policy moves in the months ahead. To be sure, investors at any level would welcome added positive momentum that might be catalyzed by a reduction in interest rates. But to astute gold investors today, beneficial price influences generated by developments in trade and/or monetary policy are the peas and carrots on the plate – not the steak.

The steak, in this case, is represented by the comprehensive, multidimensional economic, fiscal and geopolitical uncertainty expected to intensify through the foreseeable future amid an ongoing transition from global unipolarity to multipolarity as well as a consequential move toward greater deglobalization. Given this, gold’s most structural drivers – the soundest, most foundational reasons for owning the metal – will remain intact for at least years to come. The world’s central banks…and now its wealthiest individual investors…clearly have made note of this likelihood. Others might be well advised to do the same.  

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

Well, it was yet another “week that was” in the U.S. economy, with all kinds of developments and data…including unwelcome jobs numbers and renewed tariff distress…energizing the news cycle and sending markets reeling.

By the time Friday’s trading session ended, each of the three major averages had lost significant ground on the week. The Dow Jones Industrial Average suffered the biggest drop, tumbling 2.9% to finish at 43,588.58…more than 1,200 points lower than where it was at Monday’s open. The broader S&P 500 and tech-heavy Nasdaq Composite fell nearly as hard, ending the week down 2.4% and 2.2%, respectively.

The indexes suffered much of their damage on Friday in the wake of a much-worse-than-expected July jobs report. The Labor Department not only revealed that job growth last month fell far short of consensus expectations…but also announced significant downward revisions to the jobs numbers from May and June. I’ll be discussing the employment data in greater detail shortly.

Putting additional downward pressure on markets this week was the White House’s updated reciprocal tariff regime, now set to go into effect August 7. The revised duties range from 10% to 41% and are poised to be levied against nearly 70 countries.

This, in fact, turned out to be one of the busiest weeks for the economy in quite a while. Let’s take a look beyond the headlines at just some of what made it so hectic.

Fed Policy Meeting Sees Its First Multiple Dissenting Votes in Decades

One of the week’s biggest economic headlines was generated by the Federal Reserve’s fifth policymaking meeting of the year…but it wasn’t the actual decision of the Federal Open Market Committee, which, to no one’s surprise, left interest rates unchanged at the target range of 4.25% to 4.5%.

Instead, it was the casting of “No” votes on that decision by Federal Reserve Governors Michelle Bowman and Christopher Waller, making it the first time in more than 30 years that multiple dissenting votes were cast against a rate decision. Both Bowman and Waller have said they think inflation is sufficiently under control but that the labor market is in peril, and the pair believes the time has come for the central bank to resume easing.

They were, of course, outnumbered 9-2 by the other members of the FOMC, who…as of this past Wednesday…were more concerned about the impacts that tariff-induced inflation could have on prices than they were about any looming weakness in the economy.

“Our obligation is to keep longer term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Fed Chair Jerome Powell said in the post-meeting press conference.

Powell’s noncommittal stance on the subject of rate cuts in the near term prompted traders to lower their expectations of a reduction in September from 64% to 46%. But two days later, those odds soared again with the release of the government’s nonfarm payrolls report for July, the contents of which seemed to validate the very concerns of dissenting Fed officials Bowman and Waller.

Job Growth Sinks in July…and, as It Turns Out, Positively Tanked in May and June

As I noted earlier, the government’s nonfarm payrolls report for July proved to be an especially large – and especially unpleasant – catalyst of market activity this week.

The primary headline, that the economy added a measly 73,000 jobs in July and the unemployment rate rose to 4.2%, was bad enough. But to make matters (much) worse, the Bureau of Labor Statistics (BLS) revised down the May and June job-growth numbers by a stunning 258,000, total.

According to BLS revisions, just 19,000 jobs – not the previously stated 144,000 – were picked up by the economy in May, while June saw a mere 14,000 jobs added…far below the 147,000 that the government originally said were gained.

Beyond the immediate impact to financial markets, which I discussed earlier, the report suddenly put a September rate cut back in the center of the table, just one day after PCE inflation readings seemed to push it further away.

“This is a gamechanger jobs report,” Heather Long, chief economist at Navy Federal Credit Union, told CNBC. “The labor market is deteriorating quickly.”

Game-changing, indeed. By the weekend, traders had raised the odds of a September rate cut up to 80%.

And that’s not all. Concluding that the wonky jobs data was a sign of either gross ineptitude or politically motivated malfeasance, President Trump took the extraordinary step on Friday to fire BLS Commissioner Erika McEntarfer, who had been appointed to the position in 2023 and confirmed by the Senate in January 2024.

Announcing the dramatic change on Truth Social, President Trump wrote:

“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.”

Fed’s Favorite Inflation Metric Sped Up Across the Board in June

Sandwiched in between Wednesday’s Fed rate decision and Friday’s jobs report was the release of a key inflation gauge for June that at the TIME seemed to validate Fed Chair Powell’s “wait-and-see” approach to monetary policy.

On Thursday, the Commerce Department reported that the personal consumption expenditures (PCE) price index…known to be the Fed’s preferred inflation measure because it better reflects changes in consumer behavior…accelerated on both monthly and annual bases last month.

According to the data, headline PCE increased 0.3% for the month, up from May’s 0.1% pace. Year over year, PCE in June climbed 2.6%, speeding up from 2.3% in May.

As for core PCE, which strips out more volatile food and energy prices, that also accelerated in June. The monthly rate came in at 0.3%, a tenth of a percentage point faster than in May, while annual core PCE rose 2.8% in June…also a tenth of a point faster than the month before.

In their assessment of the data, economists seem to be largely on Powell’s side in the tug-of-war between the Fed and the White House over what should happen with interest rates as tariff impacts continue to work their way through the economy. Following the release of the PCE numbers for June, Michael Pearce, deputy chief U.S. economist at Oxford Economics, declared, “Tariffs are beginning to make their mark on the inflation data”; and senior economist Sal Guatieri of BMO Capital Markets informed clients, “We will need to see either calmer inflation figures or weaker growth or softer job conditions to spur a rate cut on Sept. 17.”

As we know from our previous discussion of the jobs report which came out on Friday, glaring signs of “softer job conditions” now are in evidence. Does that mean September rate cuts are suddenly a done deal? Not necessarily. But if the August nonfarm payrolls report…which comes out September 5…telegraphs still more epic weakness in the labor market, it’s hard to imagine the Fed again will refrain from cutting rates.

Consumer Confidence Ticked Up in July…but Americans Remain Anxious About Tariffs, Job Market

Finally this week, a widely followed gauge of consumer sentiment suggested that Americans recently have grown a little more upbeat in their consideration of the country’s economic outlook…but remain anxious about what lies ahead for the labor market as well as how tariff impacts ultimately might manifest.

On Tuesday, The Conference Board reported that its proprietary Consumer Confidence Index came in at a reading of 97.2 last month, two points higher than the 95.2 posted in June. Despite the improvement, however, the July number represents the fifth consecutive month the index landed below the neutral reading of 100. Measures below 100 imply greater pessimism, overall, among Americans.

The story was largely the same with the Expectations Index, a component measure of the headline metric that evaluates consumers’ six-month outlook for the economy.

In July, the Expectations Index climbed 4.5 points to come in at 74.4. Despite that solid improvement, however, last month’s reading left the subindex below the critical level of 80, which implies that a recession could lie ahead.

In a statement, Stephanie Guichard, senior economist at The Conference Board, addressed two of the more prominent reasons why the metrics remain at less-than-optimal levels.

“Consumers’ write-in responses showed that tariffs remained top of mind and were mostly associated with concerns that they would lead to higher prices,” Guichard said. “In addition, references to high prices and inflation rose in July.”

Guichard also noted, “Their [consumers’] appraisal of current job availability weakened for the seventh consecutive month, reaching its lowest level since March 2021. Notably, 18.9% of consumers indicated that jobs were hard to get in July, up from 14.5% in January.”

That’s it for now; have a marvelous weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Much has been made of the numerous record highs reached by gold in recent years. It doesn’t take a genius to understand why. From January 2024 through present, gold has climbed roughly 63%, reaching record highs nearly 70 times along the way, to include at one point briefly touching $3,500 per ounce.

But according to one highly respected analyst, the metal’s more compelling behavior, in terms of price action, is just how stubborn it has been in holding on to its remarkable gains.

To be sure, Aakash Doshi, head of gold strategy at State Street Investment Management and a former head of commodities research at Citi, sees even more fresh all-time highs in gold’s near-term future. Doshi recently told Kitco News that he expects to see the metal sitting on the doorstep of $4,000 by the end of the year.

But as optimistic as Doshi is about the metal’s prospects for continued growth, he believes it’s gold’s impressive resilience…its capacity to remain well-supported and not suffer meaningful corrections right now…that investors should find most appealing – and revealing.

Doshi: Ask Not Why Gold Isn’t at $4,000; Ask Why It’s Not Dropped Below $3,000

Since reaching $3,500 in April, gold’s upward trajectory has stalled amid what’s become a period of price consolidation. But Doshi contends that the fact gold has done no worse than “stall” given the current market backdrop is especially revealing – and something of which investors should take notice.

“Instead of asking why gold isn’t at $4,000 already, given it’s already risen 26% (this year),” Doshi said, “we maybe should be asking why gold hasn’t actually fallen below $3,000, even though equities are at all-time highs and volatility is at its lowest level this year.”

Historically casual observers of the asset who’ve paid it much more attention recently may well have been motivated to do so by its headline-grabbing price jumps. Although understandable, Doshi contends that focusing exclusively on upside price potential may prompt some to look past the metal’s underlying strength…and the message it’s sending about both gold and the macroeconomy.

“[Gold investors] are waiting for the next catalyst, but there are some other structural factors in play that support buying on the dips,” Doshi said.

Among those factors, Doshi believes, are concerns about the nation’s ever worsening fiscal trajectory as well as the apparent intractability of higher inflation. Indeed, the most recent data that emerged from the PCE price index showed inflation accelerating across the board (monthly and annually, all-items and core) in June.

Gold’s Durability Can Be the Real Key to Its Upside Price Potential

Classic safe-haven assets such as gold often rely on acute uncertainty-based catalysts – such as a wave of trade policy upheaval, good news on interest rates or the outbreak of sudden nation-state military conflict – for continued dynamic growth, particularly after what already has been an extended period of dramatic price appreciation. And when those assets, bereft of any such catalysts, appear to start treading water, it’s tempting to consider that their time has passed for now.

But I would contend, as Aakash Doshi suggests, that a truer measure of gold’s longer-term viability is its capacity to retain the gains already made, particularly when conditions favorable to risk assets emerge. That kind of durability – in evidence right now – telegraphs strength at the most foundational level, fueled by the purchase activity of the largest institutional investors, both public and private, which have the most to lose when economic, fiscal and geopolitical risks become realized. And it ultimately serves, in my opinion, as the best indicator…more than any single especially spirited driver…of gold’s potential to continue reaching for records.

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.