A Reuters opinion piece is bullish gold. It's a long and detailed piece, I've summarised below:
Gold’s Surge: Bubble or Paradigm Shift?
Gold is up more than 60% this year — its strongest gain in nearly 50 years — raising the question of bubble vs. structural repricing.
Inflation-adjusted, gold is at its most expensive ever, yet speculative mania is absent.
What’s changed?
Historically, gold moved inversely with real yields.
Since 2022, gold has risen despite rising real yields and falling inflation — a major break from past behaviour.
Key catalyst
The U.S. seizure of Russia’s FX reserves shook confidence in dollar-denominated assets.
Central banks began buying gold as a sanction-proof, politically neutral reserve.
Official gold purchases have exceeded 1,000 tonnes annually for three consecutive years.
Why this doesn’t look like a bubble
ETF holdings are still 10% below 2020 highs.
Gold-miner ETF shares have shrunk by one-third.
Wall Street is sceptical, forecasting future gold prices well below spot.
Speculators are preoccupied with crypto and AI assets instead of metals.
Macro backdrop is radically different from the 1970s
The U.S. has shifted from creditor to largest global debtor.
U.S. federal debt has jumped from 30% to ~120% of GDP.
Fiscal deficits average ~6% of GDP.
Fed policy rates are falling, not rising into double digits.
What could drive the next phase
Private investors hold very little gold.
If they begin reallocating — even modestly — gold could see a second, much larger leg higher.
Bonds no longer hedge equities reliably; gold has become the only consistent risk-off asset in recent turbulence.
