Gold smashed through the $3,300 barrier this week with all the subtlety of a bull in a china shop. I've watched precious metals for years, and this rally has a different feel to it—less speculative froth, more genuine financial anxiety.
The yellow metal opened the week around $3,218 before charging upward to peak at a jaw-dropping $3,366 by Friday. That's a 4.5% weekly gain, folks. Not too shabby for an asset that critics love to dismiss as a "barbarous relic."
Look, gold rallies come in different flavors. This one tastes distinctly like the "I'm genuinely worried about the global financial system" variety, not the "my crypto portfolio just exploded so I need a lifeboat" panic-buying we sometimes witness.
Rich Checkan from Asset Strategies International pointed out something I've noticed countless times in my two decades covering metals markets: "Whenever I see gold and silver surge before a long weekend, it suggests the bias is upward... Investors are making it clear they want to be in the market before the thin holiday trading on Monday."
What he's really saying? Traders aren't just bullish—they're "I don't want to spend three days without gold exposure" bullish. That's an entirely different beast.
The sentiment numbers back this up. Kitco's survey shows 81% of Wall Street experts are bullish on gold's prospects next week. When was the last time 81% of Wall Street agreed on anything? These are people who'd debate whether water is wet if you gave them a forum.
Interestingly, Main Street investors are less convinced, with only 63% bullish. That gap actually makes me more confident in the rally. Having covered market psychology since the early 2000s, I can tell you that when retail investors are cautious while institutions are all-in, there's usually more upside to come.
What's driving the gold train? I tend to use what I call the "everything's breaking at once" framework. We've got renewed trade war tensions (historically excellent for gold), U.S. credit rating concerns (phenomenal for gold), and general market uncertainty (gold's comfort zone).
Adam Button at forexlive.com put it perfectly: "The trade war is back on, and gold is the trade war trade." Couldn't have said it better myself.
The fascinating thing about this particular run is that it's happening despite the dollar's relative strength. Traditionally, gold and the dollar move like awkward teenagers at a school dance—when one steps forward, the other retreats. But lately? They're moving in tandem, which tells you something profound about the current risk environment. Investors aren't just seeking dollar safety; they want hard assets in their pocket too.
I mean, think about what gold represents in our collective financial psyche. It's the asset you buy when you suspect other assets might be fibbing about their true value. It's financial skepticism in metal form.
Looking ahead, we've got a veritable feast of U.S. economic data coming—GDP numbers, PCE inflation data, Fed minutes—all potential catalysts for gold's next move. The momentum suggests $3,400 is well within reach, with some particularly optimistic souls whispering about $3,500.
(Not that I'm making predictions. I learned my lesson about specific price targets back in 2011 when gold's last major bull run left egg on many analysts' faces.)
The thing about gold rallies is they tend to feed on themselves... until suddenly they don't. The metal offers no yield, hosts no earnings calls, pays no dividend—its value is almost purely psychological, a reflection of our collective financial anxieties. Right now, those anxieties are screaming "buy," and the market is listening.
In the meantime, keep a close eye on that $3,300 support level. If it holds through the holiday weekend, we might be witnessing not just another rally, but a fundamental repricing of the world's oldest financial safe haven.
Other market notes: - The VIX just had its biggest weekly jump since March 2023. Coincidence? I think not. - Treasury yields have been doing the financial equivalent of a confused shrug. - Silver quietly outperformed gold on a percentage basis this week, but nobody likes to talk about the poor man's gold at cocktail parties. Their loss.
