Gold has been a notoriously difficult trade to time in 2026. After climbing to a 10-year high above $5,300 an ounce early in the year, the precious metal tumbled by as much as 18%, according to Goldprice.org. Yet last week marked gold’s best weekly performance since January, while gold mining stocks posted their strongest five-day run since 2008. The whipsaw has left gold’s year-to-date return close to flat, but some investors are betting the chart direction now points higher.
“Gold is the new gold,” said Pippa Malmgren, a former Special Assistant to President George W. Bush and member of the National Economic Council. She argued that the same fears that have long attracted investors to gold remain firmly in place: out-of-control U.S. fiscal spending and weak growth elsewhere. “This implies inflation,” she said, adding that the Trump administration’s pursuit of expensive foreign wars and its embrace of cryptocurrencies have added to investor unease.
“This makes nervous investors turn to conservative methods for preserving value, such as buying gold,” Malmgren said. Central banks worldwide are expanding their gold holdings, a signal of waning confidence in fiat money, led by continued accumulation from China. “Central banks never stopped buying,” said Patrick Kennedy, founder and managing partner of AllSource Investment Management. “The PBOC added 19.9 tons in July, its largest month since October 2023 and its 21st straight month of accumulation.”
Billionaire hedge fund manager John Paulson recently told CNBC that gold is only in the early stages of a long-term rally, citing a loss of faith in paper currency and runaway government spending. Paulson has been a gold bull since 2009.
Tactical rebound or deeper shift?
Joe Cavatoni, senior market strategist at the World Gold Council, views the recent bounce among U.S. investors as more tactical than fear-driven. “Gold’s recent rebound appears to be driven more by changing expectations around interest rates and the economy than by fear alone,” he said. “There are signs of weakening, particularly on the jobs front, and markets are responding quickly.”
Cavatoni pointed to increased options activity in the SPDR Gold Shares ETF (GLD) as evidence that U.S. flows are tactical, while buying from Asia and Europe tends to be “stickier.” He added that investors are increasingly using gold for wealth preservation and portfolio diversification rather than as a simple safe haven.
With expectations for a Federal Reserve rate hike falling after tame inflation data, gold’s appeal relative to other rate-sensitive assets and a softer dollar has increased. Nick Cawley, a contributing analyst at Solomon Global, noted that rate-hike expectations had already declined by over 20 percentage points in the past week before the latest inflation print, helped by benign inflation trends and last Friday’s soft non-farm payrolls report.
Not a rate-cut trade — yet
Kennedy said his firm treated the first-half selloff as a buying opportunity, adding to the low-cost GLDM ETF off the July technical bottom. But he cautions that fading hike odds are not the same as a Fed ready to cut. “This is not a rate cut trade, at least not yet. The Fed has been parked at 3.50 to 3.75 all year and September was genuinely live for a hike right up until the payrolls miss,” he said. “What changed is that the hike tail risk came out of the market.”
Wednesday’s CPI print, at 0.1% monthly and 3.4% annual with core at 2.5%, was in line with expectations and kept that narrative going, Kennedy said. “It’s a different setup than a cutting cycle, and it matters when you’re asking whether this has legs.”
Technically, last week’s move above the 50-day moving average and the break of this year’s pattern of lower highs should support further gains, according to Cawley. Any pullbacks are expected to be short-lived and viewed as entry opportunities for gold’s next leg higher.
Mining stocks and ETFs in focus
Some traders are turning to gold mining stocks for value, said independent trader Vince Stanzione. “Many quality mining stocks are trading on single digit forward P/Es and paying great dividends,” he said, pointing to AngloGold Ashanti and S&P 500 member Newmont. Retail traders often prefer ETFs, with Van Eck Gold Miners (GDX) covering larger miners and Van Eck Junior Gold Miners (GDXJ) targeting juniors. “Many gold miners also have exposure to silver as well, which moves in sync with gold,” he added, noting silver had its best week since February.
For retail investors, Shawn Young, chief analyst at MEXC Research, said bullion ETFs like GLD and iShares Gold Trust (IAU) are the most direct way to express a bullish gold view. Kennedy noted that GLDM, with a 10-basis-point expense ratio, is cheaper for buy-and-hold investors, while GLD, at 40 basis points, offers better liquidity and options. IAU sits in between at 25 basis points.
The iShares Silver Trust (SLV) offers a more volatile route, while GDX and GDXJ provide operating leverage — which cuts both ways, according to Young. “GDX did roughly three times gold’s move last week … and the juniors are more violent still,” Kennedy said. “For most individual investors miners belong as a satellite position, not a core one.”
Fed leadership adds uncertainty
More volatility could lie ahead, with the upcoming Fed meeting in Jackson Hole and broader policy developments likely to determine whether the rally continues. New Fed Chair Kevin Warsh has altered the market landscape with “cautious and often ambiguous statements,” said Eugenia Mykuliak, founder and executive director at B2Prime Group. His first Fed meeting hit stocks hard, and a side effect was that gold began to climb as money shifted toward safer instruments.
Kennedy agreed that Fed uncertainty could be bullish for gold. “You have a Fed Chair signaling higher for longer into a labor market that is visibly softening. That’s a stagflation setup, and gold tends to do well when the market starts questioning whether the Fed can hit both sides of its mandate,” he said.
Despite gold having more than doubled between late 2023 and the January record, Kennedy sees nothing broken in the longer-term secular case. “If anything the drivers accelerated,” he said, pointing to Brent near $90 with the Strait of Hormuz still closed and Iran holding conditions on reopening it, keeping forward inflation risk alive even with the July print cooling.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/12/gold-prices-metals-fed-rate-hike-inflation.html
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Do your own research and consult a licensed professional before making financial decisions.
