Gold Hits “Peak Trendiness” as Analysts Suggest Increased Popularity Durability amid Economic Volatility

Monday 13 October 2025 12:01 pm

Share

• 
  Share on Facebook
• 
  Share on Twitter
• 
  Share on LinkedIn
• 
  Share on WhatsApp
• 
  Share on Email

Gold hit yet another all-time high on Monday

The record gold rally of the past few months “may have peaked in trendiness”, a top investment bank has predicted despite the precious metal hitting fresh highs on Monday fuelled by Donald Trump’s threat last week to upend trade with China.

Deutsche Bank said that while it was not predicting “an impending correction”, the length and intensity of the yellow metal’s upturn has made a “period of more neutral behaviour” more likely.

“The gold rally of September-October may have peaked in trendiness,” Deutsche Bank analyst Michael Hsueh wrote in a note. “Trending episodes… have lasted on average for 19 days in the past three years, so the current episode of 29 days (and counting) is longer than median and average.”

Fears over western governments’ ballooning debt piles and a flurry of political crises helped carry the price of gold past $4,000 per troy ounce last weeklittle more than six months since it cleared $3,000 for the first time in March.

The spot price of the precious metal – a safe haven asset traditionally used as a hedge against inflation – has risen more than 22 per cent since August, alongside striking gains to bitcoin and other cryptocurrencies. The rally has been dubbed the ‘debasement trade‘ by some, because of fears among investors that governments will look to devalue their currencies as a means of inflating away debts.

Political crises accelerate gold rally

Fuel has been added to the rally by the ongoing political crisis in Francewhich saw the country lose its prime minister less than 24 hours after his cabinet had been appointed, and the extended government shutdown in the United States. Japan is also poised to appoint a pro-stimulus Prime Minister who has previously called for the country’s central bank to lower interest rates, a traditional tailwind for gold.

And the rally was given further momentum when Donald Trump threatened to unleash fresh tariffs of 100 per cent on all imports from China on Friday, after President Xi Jinping chose to tighten rules on the country’s exports of rare earth minerals. And even though the US President sought to cool rising tensions in a Truth Social post on Sunday, the yellow metal’s spot price continued to make gains on Monday.

Deutsche Bank said the most recent spurt in gold, which was trading at just over $2,000 per troy ounce as recently as the start of 2024, was likely to tail off as the rally runs out of steam.

But Hsueh added that any slowdown would not necessarily “signal an impending correction”, saying tracker fund data showed “investors reducing purchases in the last week, but not selling”.

Read more

‘Storm of volatility’ carries gold past $4,000 per ounce

Similarly tagged content:

Sections

Categories

People & Organisations

What are the potential risks associated with investing in physical gold?

Why Gold is Shining Brighter Than Ever

Recent market analysis indicates gold is experiencing a surge in popularity, dubbed “peak trendiness” by some industry observers. This isn’t simply a fleeting fashion; analysts believe this increased demand for gold investment is rooted in genuine concerns about global economic instability and a desire for safe haven assets. The current climate – marked by inflation, geopolitical tensions, and fluctuating stock markets – is driving investors towards the perceived security of physical gold and gold-backed ETFs.

Decoding the Current Gold Rush: Key Drivers

Several factors are converging to fuel this gold rally. Understanding these drivers is crucial for anyone considering adding precious metals to their portfolio.

* Inflation Hedge: Historically, gold has served as a reliable hedge against inflation. As inflation rates remain stubbornly high in many countries, investors are turning to gold to preserve their purchasing power.

* Geopolitical Uncertainty: Global events, including conflicts and political instability, create risk aversion. Gold benefits from this as investors seek a store of value outside traditional financial systems. The ongoing situation in Eastern Europe and tensions in the South China Sea are prime examples.

* Interest Rate Policies: While rising interest rates can sometimes dampen gold’s appeal (as it doesn’t yield interest), the expectation of potential rate cuts in the future is bolstering demand.

* Currency Devaluation: Concerns about the devaluation of major currencies, like the US dollar, are also pushing investors towards gold as an option.

* Central Bank Buying: Notably,central banks worldwide have been increasing their gold reserves,signaling confidence in the metal’s long-term value. This trend is a notable indicator of broader market sentiment.

Gold Investment Options: A Diversified Approach

There are numerous ways to invest in gold,each with its own advantages and disadvantages.

1. Physical Gold: This includes gold bars, gold coins, and gold jewelry. While offering direct ownership,it comes with storage and security concerns.
2. gold ETFs (Exchange-Traded Funds): These funds hold physical gold and offer a convenient and liquid way to gain exposure to the gold market. Popular options include SPDR Gold Shares (GLD) and iShares Gold Trust (IAU).
3. Gold Mining Stocks: Investing in companies that mine gold can offer higher potential returns, but also carries greater risk.
4. Gold Futures contracts: These are agreements to buy or sell gold at a predetermined price and date. They are highly leveraged and suitable for experienced traders.
5. Gold IRAs (Individual Retirement Accounts): Allow investors to hold physical gold within a tax-advantaged retirement account.

Ancient Performance & Long-Term Trends

Looking back, gold has consistently demonstrated its value during times of economic turmoil.

* The 1970s: During the stagflation of the 1970s, gold prices soared as inflation eroded the value of the dollar.

* The 2008 Financial Crisis: Gold experienced a significant price increase during the 2008 financial crisis, as investors fled to safe haven assets.

* The COVID-19 Pandemic (2020): The pandemic-induced economic uncertainty led to another surge in gold prices, reaching record highs.

Analysts predict that the current trend could continue for the foreseeable future, notably if economic volatility persists. The price of gold is currently influenced by a complex interplay of factors, making accurate predictions challenging, but the underlying fundamentals suggest continued support.

Benefits of Including Gold in Your Portfolio

Adding gold to a diversified investment portfolio offers several potential benefits:

* Portfolio Diversification: Gold typically has a low or negative correlation with other asset classes, such as stocks and bonds, providing diversification benefits.

* Inflation Protection: As mentioned earlier,gold can act as a hedge against inflation.

* Safe Haven Asset: gold is often considered a safe haven asset during times of economic and political uncertainty.

* Long-Term Value Retention: Gold has historically maintained its value over long periods.

Practical Tips for Gold Investors

* do Your Research: Understand the different investment options and their associated risks.

* Diversify Your Holdings: Don’t put all your eggs in one basket. Allocate a portion of your portfolio to gold, but also invest in other asset classes.

* Consider Your Investment Horizon: Gold is generally considered a long-term investment.

* Be Aware of Storage Costs: If you invest in physical gold,factor in the costs of secure storage.

* Monitor Market Trends: Stay informed about economic and geopolitical developments that could impact gold prices.

* Consult a Financial Advisor: Seek professional advice before making any investment decisions.

Real-World Example: The Impact of the Ukraine Conflict

The Russian invasion of Ukraine in February 2022 promptly triggered a flight to safety, with gold prices rising sharply. Investors sought refuge in the perceived stability of gold as geopolitical risks escalated. This event underscored gold’s role as a crisis asset and highlighted its responsiveness to global events. The gold market reacted swiftly,demonstrating its function as a barometer of global risk sentiment.

Understanding LSI Keywords & Search Intent

This