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.
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