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.

America’s gross federal debt is now more than $37 trillion. The annual budget deficit is projected to average – average – well over $2 trillion through 2035. And in just nine years, the gross federal debt is forecast to be 50% higher than current levels while debt held by the public is forecast to reach above 120% of GDP.

And in the assessment of hedge fund legend Ray Dalio, these worrisome numbers are about all that he needs to hear to believe gold…and perhaps Bitcoin…now are exceedingly critical portfolio assets.

Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund, and a longtime critic of Uncle Sam’s fiscal profligacy; a profligacy the money manager thinks is poised to doom investors who refrain from adding meaningful quantities of key alternative assets to their holdings.

This past weekend, Dalio was a guest on CNBC’s Master Investor Podcast, and used the opportunity of his appearance to issue yet another warning about the nation’s unsustainable fiscal trajectory.

“It’s spending 40% more than it takes in,” Dalio said of the government, “and it can’t really cut spending because so much of it [spending] is fixed.”

In other words, warned Dalio:

“We are at the point of no return.”

America’s Fiscal Ills Put the Nation at Risk of Suffering “an Economic Heart Attack”

Dalio likened America’s distressed fiscal structure to a failing human circulatory system…and suggested the economy is likely to suffer an eventuality every bit as dire:

“The credit system is like a circulatory system that brings nutrients—buying power—to different parts of the economy. If that buying power is used to generate income, then the income services the debt, and it’s a healthy system. But when debts, debt service payments, and interest rates rise, they begin to crowd out other spending—like plaque in the circulatory system—creating a problem akin to an economic heart attack.”

And according to Dalio, it is not just the U.S. that’s facing a fiscal flatline…but all Western economies.

“Just like in the ’70s or the ’30s, they will all tend to go down together. We’ll pay attention to their relative movements, but they will all decline in value—relative not to fiat currencies, but to hard currencies. And that hard currency is gold,” Dalio said.

Gold. The 5,000-year-old medium of exchange and store of value to which all other currencies are compared. And, in the assessment of Dalio, the one true life preserver for investors he believes are destined to one day find their portfolios drowning in a sea of government debt.

It’s no secret that central banks have for years been putting a great deal of faith in gold’s potential to hedge, diversify and otherwise protect reserves. Central banks have been net purchasers of gold since the financial crisis (2010) and have been stockpiling the metal at or near record pace since 2022.

Debasement-Fighting Assets Should Make Up 15% of Portfolios, Says Dalio

Noting that gold overtook the euro earlier in 2025 to become the second-largest reserve currency, Dalio suggested that investors might do well to take a page straight from the more recent editions of the central bank handbook and allocate 15% of their portfolios to the yellow metal.

Notably, the storied money manager also raised the possibility of Bitcoin serving as a useful defense against fiscal instability. But Dalio clarified that while he owns both assets, it’s gold that he believes may serve as the more reliable hedge.

“I strongly prefer gold to Bitcoin,” Dalio clarified, “but that’s up to you.”

The overriding issue, he insisted, is making sure that one has a hedge against “the devaluation of money.”

The overwhelmingly likely prospect is that developed-market fiat currencies the world over now are in a circumstance of permanent devaluation – at least until the global economy is overcome by an explicit debt crisis. Which means any effective hedges against that condition…possibly crypto, but certainly gold…are well-positioned to thrive on a structural basis 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.

Hello, my friends!

It was yet another eventful week in financial markets catalyzed by – who else? – President Trump. More talk of replacing Federal Reserve Chair Jay Powell as well as reports that Trump won’t settle for any less than a 15% tariff on EU imports kept the major indexes in check despite some relatively upbeat numbers from elsewhere in the economy.

For the week, the Dow Jones Industrial Average finished a little lower than where it started, while the S&P 500 and Nasdaq Composite still managed to post gains of 0.6% and 1.5%, respectively.

And as far as some of the economic week’s other high-profile numbers are concerned:

Consumer Price Pressures Intensified Last Month…

Among the biggest releases were two popular inflation measures: the consumer price index (CPI) and the producer price index, which gauges price pressures at the wholesale level.

First up were the consumer numbers. On Tuesday, the Labor Department revealed that headline, or all-items, CPI accelerated 0.3% on a monthly basis in June…two-tenths of a point faster than May. CPI accelerated on an annual basis in June, as well, rising 2.7%, which is three-tenths of a point faster than the pace set in May.

As for core CPI, which strips out volatile food and energy prices, both the monthly and yearly numbers also showed inflation picking up speed in June.

For the month, core CPI rose 0.2%, which is a tenth of a point faster than May, while year over year, core increased 2.9%, up from May’s 2.8% rate.

Signs of renewed inflation resilience in CPI numbers that had been trending downward through the first several months of the year have added to concerns that White House tariffs may, in fact, exacerbate longstanding price pressures. Of particular note was the monthly 0.4% rise in apparel prices as well as the 1% jump in prices of household furnishings, goods categories that are both particularly sensitive to tariffs.

Still, the jury remains largely undecided as to how much of an inflation problem tariffs ultimately will prove to be. Referring to the June CPI numbers, Kay Haigh, global co-head of fixed income and liquidity solutions in Goldman Sachs Asset Management, noted that “on the whole, underlying inflation remained muted,” but warned:

“Price pressures, however, are expected to strengthen over the summer and the July and August CPI reports will be important hurdles to clear.”

…While Wholesale Inflation Showed Significant Moderation in June

Adding to the lack of real clarity over just how much tariffs are bedeviling prices were June’s numbers for the producer price index.

The day after its release of last month’s CPI report hinting at tariff-induced troubles, the Labor Department announced that prices paid by America’s wholesalers didn’t change at all from May on a monthly basis.

According to the data, both headline and core PPI were flat for the month. That was a surprise to economists, who had expected to learn that each measure rose 0.2% in June.

The more subdued monthly numbers reflected particularly favorably on the annual rates, with headline PPI declining to 2.3% from 2.7% in May and core PPI slowing to 2.6% in June after landing at 3.2% the month prior.

“Tariff passthrough is visible in today’s PPI data, but producer price inflation overall remains damper than many expected just a few months ago when the tariffs started rolling out,” noted Oren Klachkin, an economist with Nationwide Financial Markets.

Still, the bigger-picture view of price pressures reveals that headline as well as core inflation remain solidly above the Fed’s 2% target at both the consumer and producer levels, all but ensuring Americans won’t see another rate cut until at least September. As of right now, traders peg the chances of a quarter-point reduction in September at around 53%.

Robust Retail Sales Numbers in June Underscore Continued Consumer Resilience

In other news this week, the Commerce Department reported on Thursday that retail sales rebounded strongly in June after suffering a sizable decline the month before, implying that consumers aren’t quite ready to throw in the towel on spending despite anxiety about potential tariff impacts.

According to the numbers, headline retail sales – which include all categories of goods – rose 0.6% last month. That’s significantly higher than the 0.1% increase projected by economists and a sharp turnaround from May’s sizable drop by 0.9%.

Adjusted for June’s 0.3% rise in consumer prices, which some analysts attribute to tariff-based price pressures, headline retail sales were up a slightly less impressive 0.3%. But other numbers from the report seemed to telegraph that Americans remain enthusiastic about making the nation’s cash registers ring.

On that note, retail sales of the “control group” – a “core” version of the metric which excludes activity at gas stations, auto dealerships and building-material retailers – climbed a robust 0.5% in June. And sales at bars and restaurants, which are seen as a particularly revealing indicator of consumers’ inclination to engage in discretionary spending, jumped 0.6%.

Commenting on the stronger-than-expected sales figures, Heather Long, chief economist at Navy Federal Credit Union, wrote:

“Don’t count the American consumer out yet. There’s still a lot of trepidation about tariffs and likely price hikes, but consumers are willing to buy if they feel they can get a good deal.”

Sentiment Rises Among Consumers Rises as Their Inflation Anxiety Lessens

Finally this week, evidence continues to emerge suggesting consumer anxiety over tariffs actually may be subsiding.

On Friday, the University of Michigan issued the preliminary numbers from its Survey of Consumers for July, which showed an increase in the report’s Consumer Sentiment Index as well as declines in both the one- and five-year outlooks for inflation.

According to the data, the headline metric rose a little more than a point this month to settle at a reading of 61.8…three-tenths of a point above the consensus estimate and the index’s highest level since February.

It likely wasn’t a coincidence that the survey’s most widely followed collateral measures…the outlooks for inflation one and five years down the road…fell at the same time overall sentiment improved.

The one-year inflation forecast landed at 4.4% this month, which is a sizable drop from the 5% expectation recorded in June. As for the five-year inflation outlook, that sank to 3.6%…a drop by 0.4 percentage point from the previous month.

Like the index itself, this month’s numbers for extended inflation are the most favorable readings of those metrics since February.

Jeffrey Roach, chief economist at LPL Financial, is one of many analysts who are at least cautiously optimistic about the implications of the July sentiment numbers.

“Despite risks of rising consumer inflation in the next few months, consumers have well-anchored expectations that tariff inflation will be temporary, and that conditions should improve by the time we enter 2026,” Roach said, adding:

“Inflation expectation is an important factor for the Fed and according to this report, the trajectory looks encouraging.”

That’s it for now; enjoy the rest of your weekend!

This post is created and published for general information purposes only. The Gold Strategist blog and Bob Yetman disclaim 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.