Gold’s recent surge has unfolded without fresh fundamental drivers: real rates have risen, the dollar hasn’t broken new lows, and central bank demand—particularly from BRICS+ and China—has waned. Retail participation in ETFs has hit decade highs, signaling a rally overwhelmingly driven by Western buyers, TDS' Senior Commodity Strategist Daniel Ghali notes.

Western buyers drive Gold surge

"For months, we have argued for the debasement. And yet, gold's manic ascent has occurred during a time in which no new information pertaining to the debasement trade has hit the tapes. Yes, the Fed has cut rates, but real rates have risen since, and the dollar hasn't meaningfully printed a new low since July. At the same time, for the first time this year, we can no longer argue gold is overbought but under-owned. Central bank demand has declined notably over the last months."

"The BRICS+ purchases have become an increasingly small portion of global central bank purchases. China has remained on a buyer's strike. The driver of previous unofficial central bank purchases has not been relevant since April. Retail participation in ETFs is at least at a decade-high. Overall, this rally is overwhelmingly driven by the West."

"Unless (1) the network of gold buyers is growing at an epic pace; (2) the execution of obscured central bank purchases has changed; or (3) "this time is different" for any other reason, we see a set-up in which extreme FOMO has occurred heading into important inflection point for the prevailing market narrative. The Supreme Court decisions now have the potential to inflict large-scale damage."