Gold. Every time I mention it, somebody gets pissed at me.
With the possible exception of calling Donald Trump disabled, there’s no surer way to elicit an angry reader email or two than declaring gold intrinsically worthless. But it is. It’s worthless, dammit. As sure as Trump’s disabled.
But look, Trump’s presidency is a testament to the notion that being the polar opposite of the qualities people ascribe to you is no obstacle to staking a claim on those attributes.
Or maybe, to get the order right, it’s more accurate to say that gold’s five-millennia run as an object of human adoration despite having virtually no practical use makes an imbecile’s usurpation of the US presidency seem pretty unextraordinary.
Anyway, gold! It’s had a helluva run. A 6,000-year run, actually, but here I mean the run it’s had in 2025. Gold’s at the top of the cross-asset leader board, having returned 25% or so.
But is it overbought and overvalued? Well, yes. Because it’s just yellow metal. “It looks like the sun” isn’t the best investment case I’ve ever heard, although to be fair, it’s not the worst either.
Snark aside (and yes, this brief little jaunt was extra-heavy on the snark), investment professionals suspect gold’s run too far, too fast.
“Long gold” retained its perch atop the most-crowded trade list in the May vintage of BofA’s global fund manager survey, released on Tuesday.
As the figure on the left, below, shows, gold won 58% of the vote, beating out “long Magnificent 7” which was dethroned in April after a 24-month reign.
The figure on the right shows that the net share of pros who think gold’s overvalued is now the highest in the 17-history of BofA’s poll.
Now go get you some. Gold, I mean. It’ll please the sun gods. Also, if you’re down on your luck, sacrifice a goat. If there’s a drought, do a rain dance. (Not investment advice.)
The fact that gold is so obviously and significantly overbought is a consequence of the fact that many believe that Donald Trump is likely to wreak havoc on the world at a scale that makes the Great Financial Crisis seem like a tempest in a teapot. It’s as simple as that.
“Some people” in foreign nations noticed how gold has helped Russia survive western sanctions. No access to the USD financial system necessary if you need to raise cash of some sort to pay for imports. Or receive payment for your oil etc. Just move the title to some bars or ship the bullion. Foreign buying helps explain the persistent bid below the market, even when the USD shows some life.
Crypto was supposed to fill that role as well, but it has become increasingly clear that your transactions are not as opaque as it was once hoped. Especially in large quantities.
I will be considered loopy for this one, but gold has not returned anything to anyone unless they owned and sold it for a realized gain. I didn’t sell mine, all bought a few years ago at $1250 or less. I have received no return because I haven’t sold it yet. Neither has anyone else who still owns theirs. No one gets a return on art, land, gold, or any other asset that returns no cash while allowing its owner to retain their ownership. Such assets that produce only unrealized paper gains have no intrinsic value. Period. I’ve testified under oath about this. Scary stuff, testifying under oath, at least to me.