In 2026, gold has been a tough trade to time right, falling from a 10-year high over $5,300 an ounce that it reached early in the year by as much as 18%, according to Goldprice.org. But last week was the precious metal's best week since January, while gold mining stocks had their hottest five-day run since 2008. With volatility in the gold trade leaving it with a year-to-date return that is now close to flat, some are betting that the trading chart direction is going to continue up. But there are potential pitfalls ahead. After all, even with its recent dramatic moves, the price of gold is still higher by over $1,000 in the past one-year period.
"Gold is the new gold," said Pippa Malmgren, a former Special Assistant to President George W. Bush and member of the National Economic Council.
Malmgren says what has attracted investors to gold has not changed. Many are scared that fiscal spending is out of control in the U.S. and that growth will be weak everywhere else. "This implies inflation," Malmgren said. She added that the Trump administration's pursuit of expensive foreign wars, as well as its embrace of cryptocurrencies, both add to uneasiness among some investors.
"This makes nervous investors turn to conservative methods for preserving value, such as buying gold," Malmgren said. Central banks around the world, meanwhile, are expanding their gold holdings, which she says further signals a loss of confidence in fiat money, led by continued buying of gold by China.
