Gold Fever - Can The Rally Last Much Longer?

2026-06-05 04:17:49

(MENAFN- Investor Ideas) ( Newswire) a go-to platform for big investing ideas, including gold and silver stocks issues market commentary from deVere Group.

Gold – which has jumped around 15% this year – is on an impressive run, but there are legitimate concerns about whether the momentum can last much longer, warns the CEO of one of the world's largest independent financial advisory organizations.

The warning from Nigel Green of deVere Group comes as the precious metal hits $5,500 this week amid intensifying geopolitical tensions, ballooning government debt, and a growing sense among investors that government bonds and major currencies are becoming increasingly politicized.

The United States sits at the centre of this risk. Federal debt continues to expand rapidly, with interest costs rising and political divisions limiting fiscal reform. President Donald Trump's renewed tariff threats and assertive geopolitical posture have increased uncertainty around the policy outlook.

Europe faces parallel pressures. Highly indebted economies remain constrained by fiscal frameworks and aging populations, while Germany could face pressure to mobilize assets to stabilize the euro area during a future sovereign stress episode.

Emerging markets present another layer of risk. Countries managing volatile currencies and capital flows may sell gold to obtain hard-currency liquidity for intervention or to cover fiscal gaps.

China and Russia represent a distinct category.

No country is immune to liquidity shocks. Strategic accumulators can become sellers under extreme pressure.

He warns that official sector selling would likely trigger sharp market reactions.

Beyond official selling, deVere Group highlights other reasons the current rally could lose momentum. Gold has benefited from a powerful momentum trade, with investors drawn to rising prices and media headlines.

He adds that gold's reputation as a guaranteed safe haven is often overstated over short horizons.

He points to history as a warning for policymakers and investors alike.

He also notes that earlier attempts by Western governments to suppress gold prices during the Bretton Woods era collapsed before the system itself broke down.

Political uncertainty continues to act as a tailwind for gold, particularly as investors reassess exposure to US assets and major currencies.

He concludes that investors should treat the current rally with caution.

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