5 Critical Factors That Could End Gold’s 7-Month Green Streak

Core Viewpoint - Gold is nearing an unprecedented eighth consecutive monthly gain, but several headwinds threaten to disrupt this rally [1] Group 1: Economic Conditions - Mark Zandi, Chief Economist at Moody's Analytics, indicates that financial markets are increasingly fraught, with conditions for a significant selloff emerging [2] - US real GDP growth is just over 2%, below the potential of approximately 2.5%, while employment has stagnated and unemployment is rising [3] - Inflation remains high at 3%, as measured by the Fed's preferred consumer expenditure deflator, contributing to economic uncertainty [4] Group 2: Market Risks - Renewed tariff chaos and potential conflict with Iran add to the risks for risk assets, including gold [4] - The Treasury market is fragile, with leveraged hedge funds entering a market affected by a retreating Federal Reserve and global investors [4] - Concerns about massive budget deficits and the safe-haven status of Treasuries in a de-globalizing world further exacerbate market risks [5] Group 3: Investment Sentiment - Despite the headwinds, gold continues to attract investors as a reliable store of value, with data indicating it is on track for its eighth consecutive month of gains [5] - Bank of America strategist Michael Hartnett recommends trading oil for short-term geopolitical gains while advocating for owning gold for long-term safety [6]