Gold is surging as the S&P 500 sheds over five trillion dollars in market value. Meanwhile, gold is on track to hit a record twenty trillion dollar market cap. Over the past year, gold has crushed the stock market, surging nearly forty-four percent while the S&P 500 only managed an eleven percent rise. The message from gold is loud and clear, it’s time to pay attention.
Gold has always been seen as a safe haven during times of weakness in the dollar or lower interest rates. However, lately, it’s been defying the usual rules. Even with high interest rates and a strong dollar, gold is on a relentless upward march. The Kobeissi Letter highlights how gold’s performance this year is breaking all historical patterns. It’s clear: gold is no longer just reacting to the market, it’s leading it.
Physical gold demand in the U.S. is also breaking records. January saw gold imports hit thirty point four billion dollars, more than double the amount seen during the 2020 pandemic. Investors are turning away from U.S. Treasury bonds, which have lost their luster with the U.S. government now spending forty-four percent of GDP per year—levels not seen since World War II. This is a dramatic shift, and gold is becoming the safe haven of choice.
The fears of an impending recession are only strengthening gold’s position. Google searches for a U.S. recession have surged to levels seen in 2008 and 2020. With sixty-seven percent of U.S. consumers expecting a recession within the next year, gold is becoming the ultimate hedge. This is not just fear—this is self-preservation.
Simultaneously, the U.S. dollar is weakening. The Dollar Index plummeted three point five percent in one week, marking its second-largest drop since 2020. With the euro gaining nearly five percent against the dollar, the U.S. dollar’s dominance is eroding. As the trade war escalates, the dollar continues to lose ground. This is not a temporary blip; it’s a long-term trend, and gold is benefiting from it.
Gold’s sharp rise is no accident. It’s a direct result of reckless fiscal policy, rising fears of a recession, and declining confidence in government debt. Investors are flocking to gold not because of its price, but because of what it represents—security in an increasingly unstable world. The message from gold is simple: the global financial system is changing.
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