Bill Gross warns on gold momentum as regional bank stocks tumble
Gold’s long-term momentum continues to defy the skeptics. Despite intermittent corrections, the metal’s sustained pattern of higher highs and higher lows signals that investors remain confident in its structural uptrend. With spot gold trading near $4,360 per ounce, the debate has shifted from whether the rally is over to how far it can extend before macro conditions shift again.
The latest projections from UOB’s Global Economics & Markets Research suggest that gold could rise toward $4,780 and even $5,000 per ounce if the long-term trend remains intact. The metal’s stability above its 21-month exponential moving average, currently near $3,297, is viewed as a key condition for keeping this momentum alive. The sustained climb reflects more than technical strength—it underscores deep structural demand rooted in central bank accumulation, persistent inflation hedging, and geopolitical diversification away from the dollar.
The macro backdrop remains favorable for bullion. Real yields, though elevated, have not been enough to deter long-term buyers, while inflation expectations remain sticky across major economies. The Federal Reserve’s cautious stance on rate cuts has limited gold’s short-term upside, yet the metal continues to attract demand from investors anticipating slower global growth and renewed monetary accommodation. In parallel, the US Dollar Index has traded sideways, removing a major headwind that weighed on gold during previous tightening cycles.
Across markets, gold’s resilience contrasts with softer risk sentiment in equities. The S&P 500 has struggled to extend gains amid earnings downgrades and fiscal concerns, while Treasury yields have oscillated within narrow ranges. 2-year yields have hovered around 4.65%, with the curve flattening slightly as investors price in fewer near-term rate cuts. In commodities, silver has mirrored gold’s trajectory, rising roughly 1.5% in recent sessions to around $51 per ounce, while copper’s muted performance highlights continued caution toward global manufacturing demand.
Looking ahead, two scenarios dominate investor positioning. The base case assumes continued consolidation above $4,200 per ounce, with the uptrend holding as long as inflation expectations stay anchored and real yields stabilize. The alternative case—a sustained break below the $3,300 threshold—would signal a shift in momentum, likely triggered by a stronger dollar, a sharp rebound in bond yields, or unexpectedly hawkish Fed rhetoric. Upcoming catalysts include U.S. inflation data, central bank reserve reports, and key geopolitical risk events that could test safe-haven demand.
For portfolio managers, gold remains a critical hedge within diversified allocations. Its ability to hold ground above key technical and psychological levels suggests that institutional flows remain supportive. The opportunity lies in maintaining moderate exposure to capture upside toward $4,800 while using a close below $3,300 as a stop-loss signal. The primary risk is a sustained rise in real yields or a stronger dollar that revives carry trade flows. Until those conditions emerge, the long-term trend still favors holding gold as the world quietly prices a slower, more uncertain economic cycle.