The dollar price of gold has hit another all-time high, this time surging past $2,300 per ounce.  I wrote an article on December 4, 2023 when it had gone above $2,000 and very briefly touched $2,100.

This means that gold has gone up about 15% over the last 4 months.  This is quite significant, even though stocks seem to do that with ease these days.

Gold is the only major asset that has not taken part in the Everything Bubble.  Stocks, real estate, and Bitcoin have all exploded in price over the last 5 years.  Bonds had done quite well up until a couple of years ago.  Perhaps oil hasn’t exploded in price, but that is a single commodity.  It is an important one, but it isn’t really representative of an asset class.

Here are my thoughts on gold’s current run and what to look for going forward.

Will Gold Join the Bubble?

• Gold is still not in a bubble.  This is what we should have expected it to do given the higher-than-normal price inflation.
• It should not be surprising if gold has a significant pullback from here.  It may or may not be very temporary.  But it has gone up so fast over the last couple of weeks that a pullback should be expected.
• Gold and mining stocks are finally catching up a little with gold.  They have mostly been in a bear market, even not keeping up with the price of gold.  It seems that these stocks have finally broken through.
• If we hit a recession, all bets are off.  Gold will probably pull back, but not nearly as much as stocks.  If and when the Fed quickly reverses course and starts adding to its balance sheet again (instead of trying to slowly drain it), then gold will likely be a good speculative bet at that point.  It is always a good insurance policy.
• It is interesting that there was one day this week where stocks and Bitcoin were both down in big percentage terms while the price of gold went up.  Bitcoin seems to be more correlated to the Nasdaq than gold, which is quite telling.  I believe it’s because Bitcoin and the Nasdaq stocks are quite speculative.  They are part of the casino game.
• Silver has finally gone up in price, but it is still way off the all-time high.  This is actually the place to speculate for investors in precious metals.  Gold is the rock.  It is more stable.  Silver has more potential to go multiples higher.  It also has the most potential to go significantly lower.  Central banks don’t buy silver.  They do buy gold.
• Maybe CNBC will finally start to show the price of gold more instead of constantly showing the price of Bitcoin.  As I’ve said, I don’t really blame CNBC for doing this, as they are just responding to consumer demand.