Why This Gold Bull Market May Only End With a “Great Event”
Gold’s latest rally isn’t just another cyclical trade. It sits on top of deep structural trends in politics, fiscal policy and global liquidity that all point in the same direction: the real value of paper currencies, especially the US dollar, is being chipped away over time.
First is the political shift. In the US, a deliberately “weak dollar” stance is now seen as good politics because it supports manufacturing, employment and equity markets in key swing states. Policies that cut tariffs, taxes and the “price of money” help keep the boom going, and the data show the dollar index tracking closely with presidential approval. A softer dollar is no longer an accident; it is a feature of the policy mix.
Second is fiscal excess. Over the past five years, US nominal GDP has risen roughly 58%, but federal debt has climbed even faster—about 64% to nearly 39 trillion. Running large budget and current‑account deficits at the same time forces a choice: either embrace painful austerity or quietly let inflation and negative real rates erode the debt burden. Markets are betting heavily on the latter, and gold is the classic beneficiary.
Third is liquidity and real yields. The report shows global rate cuts vastly outnumbering hikes in 2026 and gold trading at levels consistent with negative US 10‑year real yields. Easy money isn’t a one‑off crisis response any more; it is becoming the default setting of the 2020s.
History suggests that “great gold bulls only ended by great events,” such as the Volcker shock or the end of Bretton Woods. Until a similarly decisive regime‑changing event reverses these structural forces, the path for gold is likely higher over the long run—even if near‑term corrections remain brutal and frequent.
