Big Money pros are more anxious now than during the bursting of the dot-com bubble, the 2008-09 financial crisis, and the Covid-19 pandemic.

America’s money managers are more bearish today than they have been in nearly 30 years. Barron’s latest Big Money poll of professional investors finds 32% of respondents bearish on the outlook for stocks over the next 12 months—the highest percentage since at least 1997.

Just think about all the crises investors have weathered since then: the bursting of the dot-com bubble, the 9/11 terrorist attacks, the collapse of Lehman Brothers and the 2008-09 financial crisis, the Covid-19 pandemic. And yet the Big Money pros are more anxious now than during any of those painful points for the financial markets, the economy, and the country.

The bulls’ ranks also stand at historic levels in our spring survey—historically low, that is. Just 26% of respondents call themselves bullish on the market’s prospects, the smallest percentage since 1997.

A full 50% of managers were bullish last fall, while only 18% were bearish. The change in sentiment largely reflects worries about the potential impact of the Trump administration’s tariffs on corporate earnings and the economy. Although President Donald Trump has softened his stance since announcing tariff hikes on April 2, and has shown a willingness to make deals with both traditional allies and China, the managers remain concerned about the possibility of a global trade war.

“Trump may have overplayed his hand on tariffs,” says Harris Nydick, managing member and co-founder of CFS Investment Advisory Services in Totowa, N.J. “This is one of the top five times in my career for fog and murkiness. There are so many unknowns.”

The S&P 500 index has fallen about 4% this year after two years of double-digit gains. Tariff worries are only partly to blame, however. Equity valuations were unsustainably high at the start of the year, and investors’ concentrated bets on beneficiaries of artificial-intelligence technology were rocked in late January when China’s DeepSeek revealed an AI model built more efficiently, and at far lower cost, than U.S. models.

Although stocks have rebounded from the lows reached after Trump’s tariff announcement, the Big Money managers think more selling may be in store. Some 58% say the stock market is overvalued, while 38% call stocks fairly priced. Only 4% say the market is undervalued.

The managers’ clients are even more pessimistic than the pros; 56% say their clients are bearish.

Bill Smead, founder and chief investment officer of Smead Capital Management in Phoenix, calls this “one of the craziest junctures for the markets” that he has ever seen. “We needed to unwind growth-stock mania,” he says, but adds that the tariff news led investors to “slaughter things that should do better,” namely industrial and consumer stocks that have been hit hard by trade-war concerns.

Barron’s conducts the Big Money poll twice a year, in the spring and fall, with the help of Erdos Media Research in Ramsey, N.J. The latest poll was mailed out in late March, with supplementary tariff-related questions added in early April. The spring survey drew 119 respondents.

The optimists expect the Dow Jones Industrial Average, S&P 500, and Nasdaq CompositeCOMP+1.11% to end the year about 4% to 7% above recent levels, based on their mean forecasts. But the bears see a 7% decline for the Dow and low-double-digit losses for the S&P 500 and Nasdaq. Forty-two percent of respondents describe themselves as neutral in the latest poll.

Only 20% of Big Money managers indicate they approve of Team Trump’s tariff policy, while about 80% put the odds of a tariff-related recession at 40% or higher. Still, 60% consider the market’s tariff-related tempest a buying opportunity.

Several respondents lamented the fact that the White House isn’t focusing on policies that might spur more immediate growth. “I hope the administration begins to take a look at the process of deregulation,” says John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, based in New York.

He isn’t alone: 38% of poll respondents say deregulation ought to be the administration’s top economic priority this year.

Simply put, much of the optimism about a second Trump administration unleashing animal spirits on Wall Street has evaporated since stocks surged shortly after Trump defeated former Vice President Kamala Harris in November.

“Companies are frozen; CEOs are wondering if they should play the long game or short game,” says Matthew Neyland, chief investment officer at SK Wealth Management in Providence, R.I. “There are things that could be done to make the mergers and acquisitions process easier that would help.”

Neyland says banks might be willing to lend more if they had more flexibility with regard to capital requirements. At the same time, “burdensome reporting” regulations make it more complicated for public companies to do business and have led more companies to stay private, he says.

Deregulation and tax-cut extensions may be coming, but Trump has given the market “the spinach first,” says Eric Green, chief investment officer at Penn Capital Management in Philadelphia. Green says he expects “more shoes to drop” before the market selloff is over.

He also expects a rebound in M&A activity, but notes that companies don’t want to announce major transactions until there is more clarity about tariffs. “They’ve been overwhelmed by tariffs,” he says of the White House and Congress. “Everything else might be happening, but slowly. It’s a matter of time.”

What is the biggest risk the stock market will face in the next six months? Among survey respondents, 24% cite an economic slowdown, 19% say a recession, and 14% say political turmoil in the U.S. Carter Randolph, CEO of the Randolph Company in Cincinnati, is the sole poll participant who sees no chance of a recession in the next year. Although investor and business sentiment hasn’t been good, consumer spending has held up, he says, adding that “sentiment isn’t a good investment tool.”

But others aren’t as dismissive of widespread worry on Wall Street and Main Street. Joe Gilbert, a portfolio manager at Integrity Asset Management in Rocky River, Ohio, says the economy looks to be headed toward a downturn. “Tariffs have caused things to come to a standstill,” he says. “It makes it tough to have confidence, and confidence is fuel for the economy, so a recession is more likely than not.”

The Bureau of Economic Analysis reported on Wednesday that gross domestic product, adjusted for inflation, fell at an annualized rate of 0.3% in the first quarter, largely due to a surge in imports ahead of the implementation of tariffs. Real GDP grew 2.4% in last year’s fourth quarter.

Economic concerns are a big reason for gold’s record-breaking rally this year. Bullion has gained almost 27% year to date, to a recent $3,312 an ounce. Gold is often viewed as a defensive holding, a commodity with currency-like qualities that performs well when the dollar is weakening. The Big Money managers are fans: 58% say they are bullish on gold.

Oppenheimer’s Stoltzfus says he thinks it’s fine for investors to own a little gold, noting the price has gotten a boost largely due to buying by the central banks of China, India, and other emerging markets seeking to diversify beyond the dollar. But Tom Forester, manager of the Forester Value fund, says gold miners might be a better play.

Forester’s fund owns Agnico Eagle Mines and Alamos Gold. Both are trading below their five-year average forward price/earnings multiples, he says, and are benefiting from lower oil prices, which reduces costs. Both are Canadian companies.

Many Big Money participants say they are looking beyond the U.S. for better values this year, with 70% calling themselves bullish on non-U. S. stocks. Charles Zhang, founder and president of Zhang Financial in Portage, Mich., tells Barron’s that he likes both developed and emerging market stocks, and favors the iShares MSCI EAFE Value exchange-traded fund and the Vanguard FTSE Emerging Markets ETF. “The U.S. dollar is weaker; that and a stronger euro are helping international stocks,” he says.

Zhang, No. 1 in the Barron’s ranking of independent advisors, also sees potential for Chinese stocks to keep rising, noting that Alibaba Group Holding and other leading Chinese stocks still look reasonably priced. Alibaba is up more than 40% year to date but trades for just 13 times the next 12 months’ expected earnings.

Better prices elsewhere, coupled with frustration about U.S. trade policies, have led some investors to throw in the towel on U.S. assets. “Some clients are apoplectic,” says Sandra S. Martin, managing director of Martin Investment Management, which has offices in Palm Beach Gardens, Fla., and Evanston, Ill. She says some of the firm’s Asian clients are now focusing more on international stocks.

It isn’t all doom and gloom in the investment world. A volatile start to 2025 has created better buying opportunities in some stocks that had become too rich. “The average investor needs to think for the long term,” says Joseph Parnes, president of Technomart Investment Advisors in Baltimore. He calls himself a contrarian, and bullish. “You should take advantage of downturns, and within two to three years we should see solid growth,” he says.

Sharon Hill, a senior portfolio manager at Vanguard, likes dividend-paying stocks, particularly in the banking and pharmaceutical industries, and especially as bond yields retreat. “High-yielding stocks are already more attractive as a safety play,” Hill says.

She expects volatility in the bond market to make them even more so.

Many Big Money men and women are upbeat about the outlook for bonds. Nearly 75% of the survey participants say their weighting in fixed-income assets is higher than six months ago, while 70% say they are bullish on bonds. “There is still value in bonds,” says Erica Snyder, CEO of Hunter Associates, with offices in Pittsburgh and Salem, Ohio. “We see the Federal Reserve stepping in to cut interest rates a little bit a few times this summer.”

Rate cuts could put more downward pressure on the 10-year Treasury yield, which has fallen in recent months to a current 4.17%. Sixty-two percent of Big Money respondents expect the 10-year yield to be 4% or lower a year from now.

Lower bond yields are a boon to risk assets, prominently including equities. Jose Medeiros, a managing partner at Stonerise Capital Partners in San Francisco, likes the prospects for Meta Platforms, Amazon.com, and Alphabet. “Tech isn’t a fad; it is a growing part of the global economy, and that isn’t going to change,” he says. “Tech companies are growing earnings at a much faster rate than the broader market, with much higher margins and better cash-flow generation. Tech stocks should trade at higher multiples on that alone.”

John Maffei, chief investment officer at MFM Capital Management in Orlando, Fla., says he has been “looking to scoop up values,” particularly dividend payers, as the market has fallen. “The selloff in some stocks has been overdone with this market volatility,” he says, adding that his clients aren’t panicking.

Still, 2025 is likely to remain a year of surprises. And if subsequent quarters mirror the first, investors could be in for a tumultuous ride. “It is a difficult market,” says Ken Laudan, manager of the Buffalo Blue Chip Growth fund. “You have to be comfortable being very uncomfortable.”

If the Big Money managers are preparing for more market turbulence, the rest of us should be, too.

Read the full story HERE.

First-quarter demand up 1 per cent to 1,206 tonnes as World Gold Council highlights uncertainty premiums associated with US assets

Growing economic risks and uncertainties pushed first-quarter demand for gold to the highest level since 2016, with prices expected to remain strong for the rest of the year, according to two outlook reports.

“The broader economic landscape remains difficult to predict, and that uncertainty could provide upside potential for gold,” Louise Street, senior markets analyst at the World Gold Council, said in a reported released on Wednesday that showed global gold consumption increased by 1 per cent year on year to 1,206 tonnes in the first three months of the year.

“As turbulent times persist, safe haven demand for gold from institutions, individuals and the official sector could climb higher in the months to come,” she said.

The council’s report echoed one released by the World Bank on Tuesday that said strong safe-haven demand for gold is expected to persist in the near term, buoyed by uncertainty, geopolitical tensions and concerns about volatility in major financial markets.

Chen Zhiwu, chair professor of finance at the University of Hong Kong, said: “Gold has benefited tremendously from the erratic exercise of power by [US] President [Donald] Trump, making the US dollar and dollar assets less trustable and forcing international investors to diversify away.”

He said investors were likely to keep turning to gold unless developments in Washington showed signs of stabilisation.

Central banks have entered their 16th consecutive year of net gold purchases, adding 244 tonnes to global reserves in the first quarter – just under a fifth less than in the same period last year.

The World Gold Council predicted that central banks are likely to continue purchasing gold in quantities similar to those seen over the past three years, driven by elevated trade-related risks and uncertainty premiums associated with US assets.

The World Bank forecast that gold prices are expected to remain more than 150 per cent above their 2015–19 average this year and next, sustained by strong safe-haven demand amid elevated uncertainties and tensions, and by further increases in central bank holdings.

“Gold prices are projected to increase by 36 per cent in 2025, year on year, before softening somewhat in 2026, assuming that policy uncertainty will start to abate,” its report said.

Peng Peng, executive chairman of the Guangdong Society of Reform think tank, said: “Gold prices are up mainly because of the US tariffs on the whole world. Also, the US dollar has gone into a down trend, with US bonds under pressure. Gold is a hedge.”

He said high prices meant Chinese institutions were more likely to buy gold than individual investors.

The price of gold bullion, which hit a record high of more than US$3,500 an ounce last week before losing some ground, remains about a quarter higher this year, Bloomberg reported on Thursday.

The World Gold Council report said demand for gold bars and coins increased by 3 per cent year on year in the first quarter to 325 tonnes, largely spurred by a surge in retail investment in China, which recorded its second-highest quarter of retail demand, offsetting weakness in Western markets.

Gold jewellery demand, however, fell to its lowest point since 2020, reaching 380 tonnes, a 21 per cent year-on-year decline, as gold prices hit 20 all-time highs during the period, affecting affordability.

The report said that with Chinese consumers facing a challenging economic environment, China was the only market to see the value of gold jewellery purchases fall in the first quarter.

Due to slower economic growth and high gold prices, the council said it expected jewellery demand to be weaker in the second quarter, while demand for bars and coins was likely to remain resilient, as investors favoured them in an environment of elevated risk.

Read the full article HERE.

The reading fell short of the 0.4% growth that economists surveyed by The Wall Street Journal expected

The U.S. economy contracted in the first three months of 2025, as businesses rushed to stock up on imports ahead of tariffs.

The Commerce Department said U.S. gross domestic product—the value of all goods and services produced across the economy—fell at a seasonally and inflation adjusted 0.3% annual rate in the first quarter. That was the steepest decline since the first quarter of 2022.

Net exports, the difference between imports and exports, were a large drag on growth in the first quarter, stripping 4.83 percentage points from headline GDP. Imports increased at a 41.3% pace in the first quarter as businesses tried to get ahead of tariffs that began to come into effect during the first three months of the year and were dramatically increased in the current, second quarter.

“The headline decline overstates weakness because a lot of that was tariff-induced pull-forward,” said Shannon Grein, an economist at Wells Fargo. “Overall, I think that it was a relatively solid underlying report when it comes to demand.”

The reading fell short of the 0.4% growth that economists surveyed by The Wall Street Journal expected.

Stocks fell sharply in early trading.

The GDP report is the first major economic scorecard for the January-to-March quarter, a period in which the White House changed hands from President Joe Biden to President Trump. January—most of which was before Trump took office—was hit by wildfires in Los Angeles and disruptive winter storms in many parts of the country.

A logistical consideration makes Wednesday’s report difficult to interpret: Imports subtract from the Commerce Department’s calculation of GDP, since they represent spending on foreign-made goods and services.

A measure of consumer and business spending that gauges underlying demand in the economy, final sales to private domestic purchasers, rose at a 3% annual rate.

Consumer spending rose at a 1.8% annual rate, slowing sharply from 4% in the final quarter of 2024. Consumers drive the U.S. economy.

Business spending on software, research and development, equipment and structures rose at a 9.8% annual rate.

The new Trump administration quickly announced levies on Mexico and Canada, which it later paused, as well as tariffs on Chinese imports. The “Liberation Day” announcement of far broader tariffs came on April 2, at the beginning of the second quarter.

President Trump has made tariffs a cornerstone of his economic agenda, saying that they will in the long term make America richer and bring back manufacturing jobs. In March, the trade deficit in goods hit a record as businesses stocked up to get ahead of tariffs.  

The U.S. economy entered the year on a strong footing: It grew at a steady pace in 2024 and inflation continued to ease. The unemployment rate held at 4.1% and employers added 456,000 new jobs in the first quarter, down from 628,000 in the final quarter of 2024.

Still, businesses and individuals are saying they are worried about the economy, due to uncertainty around tariffs and worries they will bring higher prices. Investors also took fright. Concerns about tariffs and the economy sent the S&P 500 and Nasdaq Composite to their worst quarters since 2022. 

The CEOs of major companies including American Airlines, PepsiCo and Procter & Gamble have warned that stop-start tariff announcements are complicating their planning efforts and spooking consumers. Others are slashing costs. General Motors pulled its 2025 profit guidance Tuesday, citing auto tariffs.

“Uncertainty creates a pensive and anxious consumer,” Colgate-Palmolive Chief Executive Noel Wallace said last week, when the company lowered its full-year earnings estimate. “You see consumers destock their pantries and not necessarily buy that extra toothpaste tube or that extra body wash.”

Fears of tariff-induced price increases prompted some consumers to accelerate purchases to get ahead of increased costs. Vehicle sales, for example, jumped in March. 

But even that isn’t necessarily good news for sellers. 

“Those who can are buying ahead of tariffs, that means you’re borrowing demand from the future,” said KPMG’s chief economist Diane Swonk. Such “panic purchases” also suppress growth, she noted: Imports count as a subtraction when GDP is calculated.

The potential for a pickup in inflation from tariffs combined with weaker economic momentum puts the Federal Reserve in a bind. The central bank seeks to balance dual goals of keeping inflation mild and the labor market strong.

Fed Chair Jerome Powell said in mid-April he saw a “strong likelihood” that consumers would face higher prices and that the economy would see higher unemployment as a result of tariffs in the short run.

This would create a “challenging scenario” for the central bank because anything it does with interest rates to address inflationary pressures could worsen unemployment, and vice versa, he said. 

Read the full article HERE.

As recession fears reverberate from Washington to Wall Street, Wednesday will bring the most comprehensive yardstick yet of the health of the U.S. economy when the government releases the first estimate of the country’s gross domestic product over the first three months of 2025.

Key Facts

The Bureau of Economic Analysis will release its estimate of first-quarter gross domestic product (GDP) at 8:30 a.m. EDT Wednesday here.

Consensus economist forecasts peg last quarter’s real GDP growth at a quarter-over-quarter, seasonally adjusted annual rate of 0.4%, according to Dow Jones data, a stark decrease from the prior period’s 2.4% expansion.

That would be the weakest economic growth for the U.S. since 2022’s second quarter.

Data from sources following underlying measures of economic activity suggest Wednesday’s GDP reading could be even worse than that.

The Atlanta Federal Reserve’s GDPNow model calls for -0.4% GDP during Q1 when excluding gold imports and exports, while Goldman Sachs’ tracker indicates a 0.2% contraction.

The U.S. has not had a quarter of economic contraction since Q1 2022, when GDP contracted by 1%.

Surprising Fact

Negative GDP growth is rare for the U.S., occurring just three times over the last decade: 2020’s first two quarters as the COVID-19 pandemic ground the global economy to a halt, including a record 28% GDP contraction during the second quarter, and Q1 2022, when the Fed enacted its first interest rate hike in more than three years as inflation soared to a multidecade high.

Will Gdp Indicate We Are In A Recession?

If Wednesday reveals subzero GDP growth, the U.S. will be one step closer to entering a recession, at least by one definition. A technical recession occurs when economic output contracts over consecutive quarters, meaning a negative reading during the second quarter would indicate such a downturn. The National Bureau of Economic Research defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” meaning consecutive quarters of slightly negative GDP growth may not officially trigger a recession. Some trusted observers of the economy believe the U.S. could already be on the cusp of a recession, such as BlackRock CEO Larry Fink, while major banks largely view it as a tossup whether or not the U.S. enters such a downturn, including the U.S.’ largest bank JPMorgan Chase, whose economists forecast a 60% chance of a recession this year.

Key Background

The GDP reading comes as economists debate the growing disconnect between “hard” and “soft” economic metrics. Hard data such as job growth and retail sales indicate a steady economy while survey-based measures reveal Americans’ faith in the economy has dropped precipitously, as the University of Michigan’s consumer sentiment poll revealed the weakest sentiment since July 2022. The disconnect comes as Trump has pursued the most aggressive tariffs since before World War I during the early stages of his second term. The ever-changing nature of Trump’s trade stances have also complicated analysis of the regularly scheduled updates on the U.S. economy. For example, this week’s GDP reading includes data through March 31 – two days before Trump’s “Liberation Day” tariff announcement which triggered historic stock market losses, and nine days before Trump backpedaled on many of his most aggressive country-by-country import taxes.

Crucial Quote

“Tariffs function like a tax hike, tighten financial conditions, and increase uncertainty for businesses,” Goldman economists led by David Mericle wrote in a Sunday note to clients, explaining how the levies weigh on GDP growth.

Read the full article HERE.

The waiting is the hardest part.

Whether it’s waiting for a delayed flight, to find out if we got that new job, or to see if we won the lottery, long periods of uncertainty are difficult to indulge. There’s a desire to do something—have a stiff drink, send one too many follow-ups, or spend money we don’t have—to make time go faster and to tamp down the anxiety that comes when faced with the unknown. The stock market finds itself in that position now, waiting to see whether President Donald Trump’s tariff policy will cause a recession or whether the U.S. can still emerge relatively unscathed.

Thankfully, the near certainty of doom that seemed apparent just a couple of weeks ago has faded after Trump blinked on tariffs. After gaining 4.6% this past week, the S&P 500 index has now climbed 11% from its April 8 closing low, and the temptation is to consider the worst over.

Resist that temptation. Sure, it’s easy to imagine a bull case—even a long-term one. The president, who this past week said tariffs on China will “come down substantially,” has bought himself time to work out one-on-one deals with countries around the globe, and just one deal, any deal, could cause markets to jump. His dealmaking could also push other countries to strike deals with one another. The result could be a world that hasn’t deglobalized but just reordered itself, as Jawad Mian writes in his Stray Reflections newsletter.

Adding to the case for upside, tech stocks finally showed signs of life this past week— ServiceNow jumped 21%, Texas Instruments gained more than 9%, and even Alphabet rose 7.7%, helped by its own results —good news given the underperformance of the Magnificent Seven since the DeepSeek selloff began near the end of January.

Yet the bear case seems just as reasonable. While Trump has dialed back the tariff rhetoric, the next Truth Social post could send stocks lower. And investors are still waiting to see what damage has already been done by the will-he-or-won’t-he nature of trade policy. The hard data have held up well because the penalties haven’t started yet, and that will probably be true for first-quarter gross domestic product, to be released on April 30, and April’s payrolls report on May 2. That has investors eyeing May’s or June’s results for the first sense of the damage done.

It could go either way. Polymarket puts the chances of a U.S. recession at 55%, and that seems about right, which means picking a direction, either direction, is probably no better than a coin flip. “In the very short term, the equity pain trade likely remains to the upside as the market pre-positions on tariff de-escalation,” writes J.P. Morgan strategist Dubravko Lakos-Bujas. “However, as the summer approaches, we could start to see some softness in activity due to aggressive tariff-related front-loading, lagged effects of other policies, and lower business investment activity.”

Read the full article HERE.

For centuries, gold has been the go-to haven asset in times of political and economic uncertainty. Its status as a reliably high-value commodity that can be transported easily and sold anywhere offers a sense of safety when everything else is in turmoil.

Not everyone’s a fan. Famed investor Warren Buffett has called the precious metal a “sterile” asset, telling Berkshire Hathaway Inc. shareholders in a 2011 letter that “if you own one ounce of gold for an eternity, you will still own one ounce at its end.”

Nonetheless, investors have sought refuge in bullion as the trade and geopolitical agendas of US President Donald Trump send equities, bonds and currencies swinging. They’ve piled into gold-backed exchange-traded funds, with inflows reaching $21 billion in the first quarter, according to the World Gold Council, the highest level since the Covid-19 pandemic.

The rush to gold has pushed the spot price to a series of record highs, topping $3,500 in mid-April and extending a ferocious run from last year. The yellow metal has thus far outperformed nearly every other major asset class in 2025.

Demand in China — the top bullion producer and consumer — has been one of the key drivers of gold’s ascent, propelled by concerns about the punitive tariffs Trump has placed on US imports of goods from its largest trading partner.

Gold has a track record of increasing in value in times of market stress. It’s also seen as a hedge against inflation, when the purchasing power of currencies is eroded. Inflation worries are front of mind for many right now as the new duties Trump has imposed on imports into the US, as well as the retaliatory levies introduced by other countries, risk increasing prices across the global economy.

The safe-haven status of gold has been elevated as Trump’s trade agenda shakes confidence in other typical shelters from market gyrations — namely the US dollar and government bonds — and threatens to end the idea of American exceptionalism.

Gold has historically been negatively correlated with the dollar. Because bullion is priced in dollars, when the greenback weakens, gold becomes cheaper for holders of other currencies. In mid-April, the dollar was at a three-year low against other major currencies.

Beyond market movements, owning gold is deeply rooted in Indian and Chinese cultures — two of the world’s largest markets for the metal — where jewelry, bars and other forms of bullion are passed down through generations as a symbol of prosperity and security. Indian households own about 25,000 metric tons of gold, more than five times what’s stored in the US depository at Fort Knox.

They’re famously sensitive to prices, but when gold’s appeal to investors in financial markets starts to fade, physical buyers of jewelry and bars often step in to grab a bargain, putting a floor under prices in the process.

Is it just trade war fears pushing up the gold price?

The metal’s blistering price rally since the start of 2024 was partly driven by huge purchases by central banks, particularly in emerging markets as they seek to reduce their dependency on the US dollar, the world’s primary reserve currency. Gold helps diversify a country’s foreign exchange reserves and guard against currency depreciation.

Central banks have been net buyers of gold for the past 15 years, but the speed of their purchases doubled in the wake of Russia’s invasion of Ukraine. As the US and its allies froze Russian central bank funds held in their countries, it underscored how foreign currency assets are vulnerable to sanctions.

In 2024, central banks bought more than 1,000 tons of bullion for the third year in a row, according to the World Gold Council, and they hold around a fifth of all the gold that’s ever been mined.

The sustained enthusiasm of central banks spurred Goldman Sachs Group Inc. to raise its year-end forecast for the gold price to $3,700 per ounce in April. It anticipates that $4,000 could be reached by the middle of next year.

What could halt gold’s rally?

Following a nearly uninterrupted upward march in the gold price since early last year, there could eventually be some consolidation as investors banks their gains. A major de-escalation of Trump’s tariffs and a peace deal between Russia and Ukraine could also spur a price decline.

But central banks have been the most important pillar of support for gold’s bullish momentum, meaning they have the power to do the most damage if they trim their reserves.

There’s no indication any large holder is considering this. The central banks of developed economies have sold very little gold in recent decades compared to the 1990s, when persistent sales sent bullion prices down by more than a quarter over the decade. Amid concerns that those uncoordinated sales were destabilizing the market, the first Central Bank Gold Agreement was struck in 1999, under which signatories agreed to limit their collective sales of bullion.

Does gold being a physical asset cause any issues for investors?

Owning gold typically isn’t free. Because it’s a physical object, holders have to pay for storage, security and insurance.

Investors buying gold bars and coins will usually pay a premium over the spot price. There can be geographic price differentials too and traders take advantage of these arbitrage opportunities.

That’s what happened earlier this year when fears that Trump could introduce tariffs on bullion imports pushed gold futures on New York’s Comex significantly above spot prices in London. There was a worldwide dash among those in possession of the physical metal to shift it to the US to capture the large premium and potentially hundreds of millions of dollars in profit.

Gold is usually relatively simple to shift, stashed away in the cargo holds of commercial aircraft, unbeknown to the holiday and business travelers in the cabin above. But it’s not as straightforward as loading up a jet from Heathrow Airport to JFK thanks to a quirk in the global gold market: different size requirements. In London, 400-ounce bars are the standard, while for Comex contracts, traders must deliver 100-ounce or 1-kilogram bars.

That means bullion being sent to Comex warehouses has to first go to refiners in Switzerland to be melted down and recast to the correct dimensions, before journeying on to the US. This creates a bottleneck when there’s a particular rush to rejig the location of bullion stocks.

Read the full article HERE.

The efforts by President Donald Trump and his administration to reshape the global economy will likely damage the economy and financial assets, according to hedge fund giant Bridgewater Associates.

Co-CIOs Bob Prince, Greg Jensen, Karen Karniol-Tambour said in a newsletter Wednesday that the world is undergoing a “rapid shift to modern mercantilism” that could have a negative outcome for the economy.

“We expect a policy-induced slowdown, with rising probability of a recession,” the CIOs wrote.

The Bridgewater commentary comes as the stock market has already been rocked by Trump’s tariff policies. The S&P 500 is down 8.3% year to date and 5.2% since the April 2 rollout of Trump’s so-called reciprocal tariffs. Many of those levies have since been paused, but tensions have escalated between the U.S. and China.

Outside of the stock market, U.S. bonds and the dollar have also declined in recent weeks. Some Wall Street experts have suggested that the widespread decline could be a sign that foreign investors are backing away from the U.S. in the Trump era.

Bridgewater hinted at this idea in the newsletter, saying that the policy changes create “exceptional risks to US assets, which are dependent on foreign inflows.”

The combination of an economic slowdown and a shift away from the U.S. could unwind a lot of the conventional wisdom of investing from over the past decade, when America financial assets and economic growth broadly outperformed other major countries.

“This shift in asset allocations has created risks if the future is different than the past. Many portfolios are increasingly vulnerable to 1) any weakness in growth, 2) central banks not being able to ease into problems, 3) equity underperformance, and 4) US underperformance relative to the rest of the world,” the newsletter said.

Bridgewater, which was founded by Ray Dalio in 1975, reported having $92.1 billion in client assets as of Dec. 31.

Read the full article HERE.

Stocks are on the rebound Tuesday, bouncing back from another miserable day on Wall Street. But American financial markets are sounding all sorts of alarm bells that one day in the green can hardly overcome.

That’s because investors have been sending a clear message: President Donald Trump’s trade war is making America an unsafe place to invest.

We know this by looking at the broader markets and the assets that traders are buying and – let’s face it – mostly selling.

US stocks

Trump’s stock market is throwing off some jaw-dropping statistics. How extraordinary? We’re now making comparisons to the Great Depression.

The Dow Jones Industrial Average has tumbled 9.1% in the first three weeks of April, the 129-year-old index’s worst performance for any April since 1932. The only other April that was worse: April 1931.

The broader S&P 500 has plunged 14% over the course of Trump’s first term – the worst performance through April 21 for any president since records began in 1928, according to Bespoke Investments.

Even with a modest rebound on Tuesday – major indexes rose over 2% each – Trump has a long way to bounce back to avoid history. The next-worst start to a term for the US stock market in the first 63 days of trading was under former President Franklin Roosevelt in 1941, with a decline of just over 9%.

Dollar

Meanwhile, traders have given up on the US dollar. During Trump’s new term, the US dollar has fallen 5.5%, by far the record dating back to when data started being collected during former President Gerald Ford’s term beginning in 1974. The only other presidential term for which the dollar started off even remotely close to this abysmal a start: Trump, during his first term, when the dollar fell 3% in the first 63 days of trading.

The dollar hit a three-year low Monday.

Bonds

Typically, when investors get nervous, they pour money into the perceived safety of American Treasury bonds – historically the safe-haven assets to rule all safe-havens. But not this time: Government bond have sold off sharply. Yields, which trade in opposite direction to prices, have surged.

The 10-year US Treasury yield has risen to 4.4% just a month after it plunged below 4%. Bonds don’t usually swing that quickly.

Foreign stocks

As traders have pulled money out of American stocks and bonds, they’ve been pouring money into investments around the rest of the world. The MSCI All World index, excluding the United States, has risen 2.9% over the course of Trump’s new term. That’s roughly on par with the start to former President Joe Biden’s term and only slightly below Trump’s first term – two periods when US stocks were also booming.

Oil

Fearful of a global recession, traders have sold off oil dramatically, giving US crude its worst start to any presidential administration since former President Bill Clinton’s second term, according to Bespoke. Oil has fallen 19% during Trump’s second term as traders worry that demand for travel and shipping will tumble. Oil fell nearly 24% during in the first few months of 1997, as Clinton started his second term.

Gold

Meanwhile, investors are looking for secure places to park their money. Among the best-performing assets is gold, which surged again Tuesday above $3,500 an ounce, hitting yet another record.

Gold has skyrocketed nearly 25% during Trump’s new term, absolutely crushing the pervious record of 13.5% during former President Jimmy Carter’s start to his term in 1977. No other president in the early days of their administrations has come close to matching Trump’s recent gold boom.

What’s going on?

Trump’s trade war is sending the global economy into shock, the International Monetary Fund reported Tuesday.

“We are entering a new era as the global economic system that has operated for the last 80 years is being reset,” the IMF said in an alarming new report Tuesday that predicted rapidly slowing economic growth – particularly in the United States – while inflation is set to reignite.

That potentially disastrous combination of slowing growth and rising inflation is difficult to overcome. Although economists don’t yet expect anything close to the so-called stagflation of the 1970s, the rapid reordering of global trade dynamics is causing tremendous confusion and unease among consumers, businesses and traders.

“The April 2 Rose Garden announcement forced us to jettison our projections,” the IMF noted, referring to Trump’s “Liberation Day” tariff announcement in which he imposed 10% across-the-board tariffs and announced punishing “reciprocal” tariffs on dozens of countries that have since been paused for 90 days.

Goldman Sachs CEO David Solomon on CNBC Tuesday noted that the confusion around Trump’s ever-changing policy has hurt business’ ability to make necessary adjustments.

“The level of uncertainty is too high. It’s not productive,” he said. “It will have an effect on the growth of the economy, and we will see that, in my opinion, relatively quickly.”

Read the full article HERE.

Gold is on a historic run, fueled by uncertainty and buying by central banks and individuals. How it fits in a portfolio.

Give gold bugs their due. The yellow metal has been a light in the investing darkness. At a recent $3,406 per troy ounce, it’s up 30% this year, to the envy of stock, bond, and Bitcoin holders. Cash-flow purists will call this a flash in the pan, but they should look again. Over the past 20 years, SPDR Gold SharesGLD+0.13%, an exchange-traded fund, has surged 630%—85 points more than SPDR S&P 500, which tracks shares of the biggest U.S. companies.

That isn’t supposed to happen. If businesses couldn’t be expected to outperform an unthinking metal over decades, shareholders would demand that they cease operations and hoard bullion instead. So, what’s going on? If this were gasoline or Nike shoes or Nvidia chips, we would look to supply versus demand. With immutable gold, nearly every ounce that has ever been found is still around somewhere, so price action is mostly about demand. That has been ravenous and broad since 2022.

That year, the U.S. and dozens of allies placed sweeping sanctions on Russia, including its largest banks, and China went on a bullion spree. Its buying has since cooled, but other central banks have stepped in. Perhaps this is unsurprising, in light of a decadeslong diversification by finance ministers away from the U.S. dollar, which is down to 57% of foreign reserves from over 70% in 2000. But the recent uptick in gold stockpiling looks to JPMorgan Chase, the world’s largest bullion dealer, like a debasement trade. Investors are nervous about President Donald Trump’s tariffs, his browbeating of the Federal Reserve Chairman over interest rates, and blowout U.S. deficits.

Surging Demand

It isn’t just bankers. Demand among individuals for gold bars and coins has been surging, with some dealers experiencing sporadic shortages. Gold ETFs were bucking the trend, but flows there have turned solidly positive since last summer, including recently in China. All told, there is now an estimated $4 trillion worth of gold held by central banks, and $5 trillion by private investors. Calculated against $260 trillion for all financial assets, including stocks, bonds, cash, and alternatives, that works out to a global gold portfolio allocation of 3.5%, a record.

What’s next? BofA Securities says that central banks have room for much more gold buying, and that China’s insurance companies are likely to dabble, too. RBC Capital Markets analyst Chris Louney says ETFs could drive demand growth from here, especially if angst reigns. “Gold is that asset of last resort…the part of the investing universe that investors really look for when they have a lot of questions elsewhere,” he says.

Russ Koesterich, a portfolio manager for BlackRock, a major player in ETFs including the iShares Gold Trust

says that gold has proven itself as a store of value, and deserves a 2% to 4% weighting for most investors. “I think it’s a tough call to say, ‘Would you chase it here?’ ” he says. “There have been some pullbacks. Those might represent a good opportunity, particularly for people who don’t have any exposure.”

Daniel Major, who covers materials stocks for UBS, points out that gold miners mostly haven’t wrapped themselves in glory in recent years with their dealmaking and asset management. As a result, a major index for the group is trading 30% below pre-Covid levels relative to earnings. UBS increased its 2026 gold price target by 23%, to $3,500 per troy ounce, before gold’s latest lurch higher. Many miners are producing at a cost of $1,200 to $2,000. Major has bumped up earnings estimates across his coverage. “I think we’re gonna see further upward revisions to consensus earnings,” he says. “This is what’s attractive about the gold space right now.”

Major’s favorite gold stocks are Barrick Gold, Newmont, and Endeavour Mining. More on those in a moment. We also have thoughts on how not to buy gold—and what not to expect it to do: Don’t count on it to keep beating stocks long term, or to provide precise short-term protection from inflation spikes and stock swoons. But first, a little history, chemistry, and rules of the yellow brick road.

Flesh of the Gods

The first gold coins of reliable weight and purity featured a lion and bull stamped on the face, and were minted at the order of King Croesus of Lydia, in modern-day Turkey, around 550 BC. But by then, gold had been used as a show of riches for thousands of years. Ancient Egyptians called gold the flesh of the gods, and laid the boy King Tutankhamun to rest in a gold coffin weighing 243 pounds. The Old Testament says that under King Solomon, gold in Jerusalem was as common as stone. Allow for literary license; silicon, an element in most stones, is 28.2% of the Earth’s crust, whereas gold is 0.0000004%.

Marco Polo described palace walls in China covered with gold. Mansa Musa I of Mali in West Africa, on a pilgrimage to Mecca in 1324, is said to have splashed so much gold around Cairo on the way that he crashed the local price by 20%, and it took 12 years to recover. To Montezuma, the Aztec king whose gold lured Cortés from Spain, the metal was called, as it still is by some in Central Mexico, teocuitlatl —literally, god excrement. Golden eras, gold medals, the Golden Rule, and golden calf—so deep is the historical association between gold and wealth, excellence, and vice that it seems to have a mystical hold on humanity. In fact, it’s more a matter of chemical inevitability.

Trade and savings are easier with money. Pick one for the job from the 118 known elements. Years ago on National Public Radio, Columbia University chemist Sanat Kumar used a process of elimination. Best to avoid elements that are cumbersome gases or liquids at room temperature. Stay away from the highly reactive columns I and II on the periodic table—we can’t have lithium ducats bursting into flame. Money should be rare, unlike zinc, which pennies are made from, but not too rare, unlike iridium, used for aircraft spark plugs. It shouldn’t be poisonous like arsenic or radioactive like radium—that rules out more elements than you might think. Of the handful that are left, eliminate any that weren’t discovered until recent centuries, or whose melting points were too high for early furnaces.

That leaves silver and gold. Silver tarnishes, but rarer, noble gold holds its luster. It is malleable enough to pound into sheets so thin that light will shine through. And, despite the best efforts of Isaac Newton and other would-be alchemists, it cannot be artificially created—profitably, anyhow. Technically, there is something called nuclear transmutation. If you can free a proton from mercury’s nucleus or insert one into platinum’s, you’ll end up with a nucleus with 79 protons, and that’s gold. Scientists did just that more than 80 years ago using mercury and a particle accelerator. But what little gold they produced was radioactive. If you think you can do better, you’ll likely need a nuclear reactor to prove it, but a large gold mine is one-fifth the cost, and we have to believe the permitting is easier.

We passed over copper due to commonness, but it has become too valuable to use for pennies. The 95% copper content of a pre-1982 penny is worth about 3 cents today. The equivalent amount of silver goes for $3.10, and gold, more than $320. But the three trade in different units. A pound of copper is up 17% this year, at $4.72. Silver and gold are typically quoted per troy ounce, a measure of hazy origin and clear tediousness, which is 9.7% heavier than a regular ounce. A troy ounce of silver is $32.70, up 13% this year.

Some Finer Points

Confused? This won’t help: The purity of investment gold, called its fineness, is measured in either parts per thousand, or on a 24-point karat scale. A karat is different from a carat, the gemstone weight, but our friends in the U.K.—who adopted troy ounces in the 15th century—often spell both words with a ‘c’. Gold bricks like the ones central banks swap are called Good Delivery bars, and weigh 400 troy ounces, give or take, worth more than $1.3 million. If you buy a few, lift with your legs; each weighs a little over 27 regular pounds (as opposed to troy pounds, which, it pains us to note, are 12 troy ounces, not 16).

There are many options for smaller players, like Canadian Maple Leaf coins, which are 24-karat gold; South African Krugerrands, at 22 karats, and alloyed with copper for durability; and Gold American Eagles, 22 karats, with some silver and copper. Proof coins cost extra for their high polish, artistry, and limited runs, and may or may not become collectibles. Humbler-looking bullion coins are bought for their metal value. Prefer the latter if you aren’t a coin hobbyist. Avoid infomercials and stick with high-volume dealers. Even so, markups of 2% to 4% are common. Costco Wholesale, which sells gold in single troy ounce Swiss bars, charges 2%, but often runs out, and limits purchases to two bars per member a day. Factor in the cost of storage and insurance, too.

ETFs are more economical. For example, iShares Gold Trust costs 0.25%, not counting commissions. For long-term holders, as opposed to traders, there is a smaller fund called iShares Gold Trust Micro, which costs 0.09%.

Resist fleeing stocks for gold. The surprisingly long outperformance of gold is mostly a function of its recent run-up. From 1975 through last year, gold turned $1 invested into about $16, versus $348 for U.S. stocks. That starting point has a legal basis. President Franklin Roosevelt largely outlawed private gold ownership in 1933; President Richard Nixon delinked the dollar from gold in 1971; and President Gerald Ford made private ownership legal again at the end of 1974.

Gold has been a so-so inflation hedge over the past half-century, and at times a disappointing one. In 2022, when U.S. inflation peaked at a 40-year high of over 9%, the gold price went nowhere. The problem is that high inflation can prompt a sharp increase in interest rates. “If people can clip a 5% coupon on a T-bill, often they’d prefer to do that than have either a lump of metal or an ETF that doesn’t produce cash flow,” says BlackRock’s Koesterich.

Likewise, while gold has generally offset stock declines this year, it hasn’t always done so in the heat of the moment. Recall tariff “liberation day” early this month, which sent U.S. stocks down close to 11% in three days, and pulled gold down nearly 5%, too. “This isn’t an uncommon scenario,” says RBC’s Louney. “When investors were losing elsewhere in their portfolio, gold was sold as well to cover those losses.”

Our top tip on how gold behaves is this: It doesn’t. People do the behaving, and they are appallingly unreliable. Use bonds as a stock market hedge. If they don’t work, fall back to patience. For inflation protection, think of assets that are a better match than gold for the goods and services that you buy every week. A diversified commodities fund has precious metals but also industrial ones, along with energy and grains. Treasury inflation-protected securities are explicitly linked to the consumer price index, which measures inflation for a theoretical individual whose buying patterns differ from your own, but are close enough.

Own a house. Stick with a workaday, reliable car. Yes, cars deteriorate. But so does nearly everything on a long enough timeline. Rely mostly on stocks, which represent businesses, which wouldn’t endure if they couldn’t turn raw inputs like commodities into something more profitable. There’s even a miner, Newmont, in the S&P 500.

The Case for Mining Stocks

Speaking of which, UBS’ Major recently upgraded both Canada’s Barrick and Denver-based Newmont from Neutral to Buy. “Both very much fall into that category of having a challenging recent track record,” he says. Newmont has lost 20% over the past three years while gold has gained 76%, which Major blames on difficult acquisitions and earnings shortfalls. Barrick, down 8%, has been in a dispute with Mali since 2023, when its government instituted a new mining code that gives it a greater share of profits. In recent days, authorities have shut the company’s offices in the capital city of Bamako over alleged nonpayment of taxes.

These are the sort of headaches that Krugerrands in a safe don’t produce. But Major calls expectations “adequately reset,” free cash flow attractive, and guidance achievable. Newmont, at 13 times next year’s earnings consensus, is selling assets, and Barrick, at 10 times, has healthy production growth.

Major also likes London-based, Toronto-listed Endeavour Mining, up 40% over the past three years and trading at nine times earnings, although he says it has “higher jurisdictional risk.” It is focused on West Africa, especially Burkina Faso, which had a coup d’état in 2022. You’d think the stock would be doing worse amid such political upheaval. Then again, Burkina Faso since 1966 has had eight coups, five coup attempts, and one street ousting of a president who tried to change the constitution to remain in power. That works out to an uprising every four years, on average.

Montezuma’s scatological name for gold might have been prescient, considering the sometimes-odious consequences for small countries that find it.

Read the full article HERE.

Gold rallied to a record as a fresh bout of US dollar weakness, criticism of the Federal Reserve by President Donald Trump and persistent trade war concerns underpinned haven demand.

Bullion roared above $3,400 an ounce, as the US currency fell to the lowest since late 2023. Trump has contemplated firing Fed Chair Jerome Powell, while making the case for lower interest rates. Fed Bank of Chicago President Austan Goolsbee warned against efforts to curtail the monetary authority’s independence.

“Firing Powell not only undermines the principle of central-bank independence, but risks politicizing US monetary policy in a way that markets will find unsettling,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. If the Fed’s credibility is called into question, that could erode confidence in the dollar and accelerate flows into havens, including gold, he said.

The precious metal has soared to successive records this year as the trade conflict has unsettled markets, hurting appetite for risk assets, while accelerating a rush to havens. Holdings in bullion-backed exchange-traded funds have risen for the past 12 weeks, the longest run since 2022. Central banks have also been adding the metal to their reserves, underpinning robust worldwide demand.

On the trade front, China warned nations against striking deals with the US at the expense of Beijing’s interests. Data due this week — including revised forecasts from the International Monetary Fund — may reinforce concerns about a global slowdown.

Banks have become progressively more positive about gold’s prospects as this year’s rally has gone from strength to strength. Among them, Goldman Sachs Group Inc. has forecast the metal could hit $4,000 midway through next year.

Spot gold surged as much as 2.2% to touch $3,400.38 an ounce, and traded at $3,399.81 as of 12:40 p.m. in London. The Bloomberg Dollar Spot Index fell 0.8%. Silver reversed an early drop to push 1% higher. Platinum rose, while palladium declined.

Read the full article HERE.