Up 9% in the Past Month, Is It Time to Start Buying Gold Again?

Gold is back in focus after hitting an all-time high of over $5,400/oz in January and then climbing ~9% over the past month, with investors citing persistent geopolitical risk, elevated inflation, and uncertainty around upcoming U.S. elections. The article argues the inflationary backdrop is supportive: a $1.8T fiscal 2025 deficit and a projected larger fiscal 2026 deficit, alongside oil above $85/bbl (+48% YTD), could keep real-asset hedging demand elevated. It also tempers expectations by noting gold returned 64% in 2025 versus a 7.8% long-run average, while highlighting GLD’s 0.4% expense ratio as a practical way to gain exposure.

Analysis

Gold’s message here is less “inflation is hot” and more “confidence in policy anchors is deteriorating.” That matters because hedge demand typically shows up first in bullion, then in miners, then in broader asset-allocation flows; if that progression continues, the real trade is not spot gold but a rising bid for balance-sheet strength and hard-asset exposure.

The second-order effect is on discount rates. A sustained hedge bid usually coincides with higher real-rate volatility and a weaker willingness to underwrite long-duration cash flows, which is a headwind for names like NVDA on the margin even if the direct linkage is small. On the other side, energy and other commodity producers should see support if inflation hedges are being bought for a broader macro reason rather than a one-off geopolitical scare.

The contrarian risk is that the move is already crowded after a strong run, so the near-term setup is more vulnerable to a clean reversal than the narrative suggests. The fastest falsifier is a combination of softer headline inflation, a hawkish Fed repricing, or a reduction in geopolitical tail risk; that would likely knock the air out of the hedge bid within days to weeks. Structurally, though, fiscal stress and debt monetization remain a 6-18 month support, so this looks like a tactical hedge regime rather than a straight-line upside story.

Key Decisions for Investors

• Use GLD as a tactical 1-3 month hedge, but size modestly; add on pullbacks rather than chasing strength. Falsify if real yields back up or gold loses its recent breakout level on a closing basis.
• Pair trade: long GDX / short TLT for 1-3 months. If gold stays firm while real rates soften, miners should outperform duration; if rates rise, the short TLT leg should cushion the drawdown.
• Stay underweight long-duration growth like NVDA on any further rise in real yields over the next few weeks. The thesis is not that NVDA is a direct loser from gold, but that the macro regime behind gold strength is usually multiple-negative for high-duration equities.
• Rotate toward energy beta via XLE versus consumer exposure such as TGT for a 1-3 month window. Inflation persistence supports commodity cash flows while pressuring margin-sensitive retail; invalidate if WTI drops back below the low-$80s and CPI momentum cools.
• Watch for a de-escalation catalyst or benign inflation print before adding aggressively to gold-related exposure. If those arrive, treat the current move as a hedge squeeze and take profits quickly.