Gold Isn't Trading Like Gold Anymore

Gold's Regime Shift

Gold's character has changed. A hawkish Fed under Chair Warsh, a surging US dollar and easing Middle East tensions have replaced geopolitics as the market's dominant drivers. Wall Street has taken notice, with Goldman Sachs cutting its year-end target to $4,900 and Deutsche Bank warning of downside toward $3,800 in a more hawkish rate scenario, while UBS still expects a recovery later this year.

The bigger shift is behavioral. Gold failed to perform as a traditional safe haven during the Iran conflict, trading inversely to oil as markets priced out worst-case scenarios. The broader cross-market selloff also saw investors sell gold to raise liquidity rather than seek protection. Longer term, central bank buying remains supportive at roughly 50 tonnes per month, although ETF holdings are still below where they started the year.