Gold is breaking out of the recent range and surging to a fresh high at $5122.
It's a fresh all-time high that's come even with silver consolidating after blasting above $100 on Friday. The strong late buying is a good sign that the bulls aren't yet exhausted, or at least that they're rotating into more gold from silver.
This rally is half-mania, half expectations that the global rules and norms are breaking down. The entire global financial system forever worked with gold and then slowly transferred to US dollars via the gold standard and the post-WWII order. That system was undermined by Bretton Woods but it still worked for another 50 years.
Now the US confiscated Russia's treasuries and is threatening to weaponize trade and the market can see the writing on the wall. Simply put, gold is safer than US dollars despite yielding nothing and being tougher to transact in.
I think the retail market wanted bitcoin to replace gold for at least part of that function but it's just not delivering. Aside from the US confiscating bitcoin from bad actors, it simply hasn't delivered in terms of price action during times of dollar uncertainty. That could change again but right now it looks like levered beta on the Nasdaq, with some of that bandwidth eaten up by AI investments instead.
Technically, RBC was out with a note today talking about $7100 and that's as good of a target as any. Once you get beyond the big round numbers and all-time highs in an asset without intrinsic value, it's tough to benchmark it. Mines can certainly be spun up well below $5000/oz but that takes years, so there's no quick supply response.
It's also not a coincidence that this rally is happening when Trump is threatening Iran. Oil prices are also 2.6% higher today on fears of war in the Middle East.
