A Reuters opinion piece is bullish gold. It’s a long and detailed piece, I’ve summarised below:

Gold’s Surge: Bubble or Paradigm Shift?

• Gold is up more than 60% this year — its strongest gain in nearly 50 years — raising the question of bubble vs. structural repricing.

• Inflation-adjusted, gold is at its most expensive ever, yet speculative mania is absent.

What’s changed?

• Historically, gold moved inversely with real yields.

• Since 2022, gold has risen despite rising real yields and falling inflation — a major break from past behaviour.

Key catalyst

• The U.S. seizure of Russia’s FX reserves shook confidence in dollar-denominated assets.

• Central banks began buying gold as a sanction-proof, politically neutral reserve.

• Official gold purchases have exceeded 1,000 tonnes annually for three consecutive years.

Why this doesn’t look like a bubble

• ETF holdings are still 10% below 2020 highs.

• Gold-miner ETF shares have shrunk by one-third.

• Wall Street is sceptical, forecasting future gold prices well below spot.

• Speculators are preoccupied with crypto and AI assets instead of metals.

Macro backdrop is radically different from the 1970s

• The U.S. has shifted from creditor to largest global debtor.

• U.S. federal debt has jumped from 30% to ~120% of GDP.

• Fiscal deficits average ~6% of GDP.

• Fed policy rates are falling, not rising into double digits.

What could drive the next phase

• Private investors hold very little gold.

• If they begin reallocating — even modestly — gold could see a second, much larger leg higher.

• Bonds no longer hedge equities reliably; gold has become the only consistent risk-off asset in recent turbulence.