Gold. It’s shiny and it looks like the sun. It must be a god.

In a lot of ways, humans haven’t changed much over the millennia. Smart as we’ve become, we still know woefully little. Indeed, the great irony of the AI revolution is that we’re on the cusp of creating artificial consciousness despite being still unable to precisely define and delineate the genuine article.

We still kill each other as a matter of course in the name of superstition, we still engage regularly in all sorts of other self-destructive behavior for no good reason and there’s a very strong (I’d call it irrefutable) argument that the planet would be far, far better off without us.

Being the pitiful failure that we are relative to our potential, it’s hardly surprising humans are still fascinated after all these centuries by an inert rock “whose” only claim to intrinsic value is scarcity, a trait shared by all sorts of things which aren’t worth — checks notes — in excess of 4,300 of today’s preferred fiat unit of account.

As the (remarkable) figure shows, gold came into Friday on track for its best week since the financial crisis if you exclude the volatility witnessed in March of 2020. This is nine weeks in a row, and 11 in 12 for bullion.

Dare I venture this is “blow-off top” territory? Or who knows, maybe it’s just the beginning. As I wrote last week, nothing says it “has” to stop. That’s the thing about speculative assets: There aren’t any “fundamentals,” per se. The laws of gravity don’t apply, even as gold has historically traded inversely to US real yields which in markets act as a kind of gravity.

Going strictly by the average scope and duration of prior bull markets, gold may have a date with $6,000 next spring. That seems far-fetched but again, we’re talking about a purely speculative asset. It can’t be knocked off course by a bad earnings report, and bad news more generally (e.g., geopolitical or macro shocks) tends to be bullish for gold.

There’s the longer-term chart. It’s, um, quite somethin’ ain’t it?

The latest excuse for buying gold is credit jitters at US banks, where some loans are souring and (hopefully isolated) fraud’s in the process of being exposed.

Stephen Miran’s doing his part by talking up the alleged necessity of a half-point Fed cut. He indicated this week he’s very likely to dissent again in favor of a larger reduction assuming the Committee opts for another “regular”-sized 25bps cut later this month.

I wondered last week if the dollar’s nascent recovery might put the brakes on gold’s record run. The answer, as it turns out, is “no.” The greenback was on pace to erase nearly half of last week’s gains as gold galloped higher.

For whatever it’s worth to you, fund managers polled by BofA this month again identified “long gold” as the most crowded trade on the planet (figure on the left, below).

And yet, the figure on the right suggests one in four don’t own any to speak of. Any gold, I mean.

Talk about underperformance. Imagine if that were equities. Up in excess of 60% on the year (as gold now is) and four in 10 fund managers owned no stocks. “Long gold” has been the most crowded trade in four of the last seven BofA monthly polls.

The only thing I’d add is that in the event gold does correct, there’s no “backstop,” so to speak. Nobody can “bail out” gold. It’s outside money. So when it sells off, you just have to roll with the punches, content in the (apparently safe) assumption that as long as men breathe, they’ll still lust for gold. After all, it’s shiny and it looks like the sun. So it must be a god.