Is Gold the New Bubble? Unpacking the Surge and Skepticism

Gold prices have surged amid global uncertainty, with a 56% increase so far this year. As stocks rebound, doubts arise whether gold itself is the next bubble. Despite bullish forecasts, concerns about valuation and correlation with high-risk stocks suggest caution for investors considering gold as an investment.

The astonishing surge in gold prices, up 56% this year, is prompting questions about whether the precious metal has become the latest bubble. This rise has occurred against the backdrop of a stock market rebound since April, raising doubts about gold's role as a safe haven.

Global uncertainties such as trade tensions and geopolitical risks initially bolstered gold demand. However, even with stabilized stock markets, gold's climb persists, driven by central bank buying and the search for alternative safe assets amid inflation concerns and monetary policy shifts.

While institutions like Goldman Sachs and JPMorgan foresee further gains, skepticism mounts over gold's valuation given its lack of tangible metrics like stocks. With increased interest from diverse investors, the need for caution becomes critical as the market evaluates gold's future in a shifting economic landscape.

(With inputs from agencies.)