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Gold analyst warns of 2011-style 'blow-off top'
Gold analyst warns of 2011-style 'blow-off top'

Miami Herald

timea day ago

  • Business
  • Miami Herald

Gold analyst warns of 2011-style 'blow-off top'

Carley Garner is a long-time futures trader who has seen a thing or two over a career that has lasted over twenty years, including gold market rallies and sell-offs. The massive rally in gold stocks this year to north of $3,357 per ounce has caught her attention, and not in a good way. Gold prices are up over 28% year-to-date in 2025, and the size and speed of the move (and the reasons behind it) remind her of a similar rally 14 years ago in 2011. Back then, the outcome for gold bugs wasn't fun. "The 2011 top was met with a 45% haircut that took nearly a decade to recover," according to Garner. Gold has enjoyed a perfect storm this year as macro crosscurrents hamstring the Fed's monetary policy, GDP slips, and the US debt outlook worsens. Unemployment has risen to 4.2% from 3.4% in 2023, CPI inflation of 2.7% is stubbornly above the Fed's 2% inflation target, the World Bank says GDP is expected to fall to 1.4% from 2.8% last year, and debt experts say the One Big, Beautiful Bill Act passed this year will add $3.4 trillion to the US debt by 2034. Related: Analyst expects gold to fall off the 'Wall of Worry' The risks have hammered the US Dollar, causing the Dollar Index to tumble 10% in 2025. Since gold is priced in USD, the Dollar's struggles have made it more attractive to overseas buyers eager to diversify their holdings away from US Treasuries in protest of President Trump's tariff policy. The significant uncertainty has also made antsy investors far more interested in gold than Treasuries as a safe haven. "Safe haven dollars can purchase gold, an asset that doesn't produce income, at an all-time high without a risk parachute, or they can buy Treasuries at multi-decade lows with a yield of 4% to 5% to cushion downside price risk," said Garner in a TheStreet Pro post. "Ironically, the masses select the former and pass on the latter." Many are indeed giving up on Treasuries' relatively juicy yields, fearing the worst. That may not be the best move, though, for newer gold bugs, given that gold has already rocketed to all-time highs this summer. Troubling times always increase interest in gold, and this isn't the first time that gold has put on a show. In 2011, gold similarly rallied sharply to all-time highs amid uncertainty around major banks and the economy, and aftershocks following the Great Recession, which was still fresh on investors' minds. Related: Major analyst resets gold price target after shocking economic data Remember the S&P cut the US debt rating for the first time in history in August 2011 because of the growing deficit, prompting a massive 5.5% drop in the S&P 500 on Aug. 8. The situation was so bad that Warren Buffett famously back-stopped Bank of America on Aug. 25, providing a cash influx in exchange for preferred stocks and warrants that eventually made Buffett's Berkshire Hathaway a mint when risk assets found their footing and gold lost its luster. "Although gold is known as a safe-haven asset, it has a history of stunning corrections," reminded Garner. "For instance, the 2011 top was met with a 45% haircut that took nearly a decade to recover." Like most investments, momentum can drive assets higher and lower than logic may dictate, making betting against it a risky endeavor. Still, most money is made or lost by acting ahead of the turning points that mark tops and bottoms. Given that gold has already made a major move higher, investors are wise to consider whether we're closer to a top like 2011 than a bottom like a few years ago. More Experts Stocks & Markets Podcast: Sectors to Avoid With Jay WoodsTrader makes bold call with Boeing stock after defense workers strikeVeteran fund manager sends urgent 9-word message on stocks "Gold is an asset that should only be bought when nobody wants it. If everyone is buying it, it's probably too late for anyone with a time horizon of less than a decade or longer," said Garner. There's certainly an argument that gold bullishness is widespread, with many talking positively about it as a hedge worth owning. "If you are looking for bearish analyst calls or news, you won't find it," said Garner. "But don't let this detract you from being skeptical." Gold was panned as a "dead dog acting as a drag to portfolios" three years ago, says Garner. Today, she says, "it is considered a must-hold in those same portfolios." In other words, contrarian thinking, akin to buying when everyone is selling and selling when everyone is buying, may make more sense today regarding gold than three years ago. "Just as conventional thinking was misguided then, it might be wrong today," wrote Garner. Related: Stock market gets 'kick in the pants' from startling inflation report The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.

Gold prices risk 'blow-off top' like 2011
Gold prices risk 'blow-off top' like 2011

Yahoo

timea day ago

  • Business
  • Yahoo

Gold prices risk 'blow-off top' like 2011

Gold prices risk 'blow-off top' like 2011 originally appeared on TheStreet. Carley Garner is a long-time futures trader who has seen a thing or two over a career that has lasted over 20 years, including gold market rallies and sell-offs. The massive rally in gold stocks this year to north of $3,357 per ounce has caught her attention, and not in a good way. Invest in Gold Thor Metals Group: Best Overall Gold IRA Priority Gold: Up to $15k in Free Silver + Zero Account Fees on Qualifying Purchase American Hartford Gold: #1 Precious Metals Dealer in the Nation Gold prices are up over 28% year-to-date in 2025, and the size and speed of the move (and the reasons behind it) remind her of a similar rally 14 years ago in 2011. Back then, the outcome for gold bugs wasn't fun. "The 2011 top was met with a 45% haircut that took nearly a decade to recover," according to Garner. Why gold rallied so much this year Gold has enjoyed a perfect storm this year as macro crosscurrents hamstring the Fed's monetary policy, GDP slips, and the U.S. debt outlook worsens. Unemployment has risen to 4.2% from 3.4% in 2023, CPI inflation of 2.7% is stubbornly above the Fed's 2% inflation target, the World Bank says GDP is expected to fall to 1.4% from 2.8% last year, and debt experts say the One Big, Beautiful Bill Act passed this year will add $3.4 trillion to the U.S. debt by risks have hammered the US Dollar, causing the Dollar Index to tumble 10% in 2025. Since gold is priced in USD, the Dollar's struggles have made it more attractive to overseas buyers eager to diversify their holdings away from U.S. Treasuries in protest of President Donald Trump's tariff policy. The significant uncertainty has also made antsy investors far more interested in gold than Treasuries as a safe haven. "Safe haven dollars can purchase gold, an asset that doesn't produce income, at an all-time high without a risk parachute, or they can buy Treasuries at multi-decade lows with a yield of 4% to 5% to cushion downside price risk," said Garner in a TheStreet Pro post. "Ironically, the masses select the former and pass on the latter." Many are indeed giving up on Treasuries' relatively juicy yields, fearing the worst. That may not be the best move, though, for newer gold bugs, given that gold has already rocketed to all-time highs this summer. Gold's rally echoes the past Troubling times always increase interest in gold, and this isn't the first time that gold has put on a show. In 2011, gold similarly rallied sharply to all-time highs amid uncertainty around major banks and the economy, and aftershocks following the Great Recession, which was still fresh on investors' the S&P cut the U.S. debt rating for the first time in history in August 2011 because of the growing deficit, prompting a massive 5.5% drop in the S&P 500 on Aug. 8. The situation was so bad that Warren Buffett famously back-stopped Bank of America on Aug. 25, providing a cash influx in exchange for preferred stocks and warrants that eventually made Buffett's Berkshire Hathaway a mint when risk assets found their footing and gold lost its luster. "Although gold is known as a safe-haven asset, it has a history of stunning corrections," reminded Garner. "For instance, the 2011 top was met with a 45% haircut that took nearly a decade to recover." Is gold still worth buying now? Like most investments, momentum can drive assets higher and lower than logic may dictate, making betting against it a risky endeavor. Still, most money is made or lost by acting ahead of the turning points that mark tops and bottoms. Given that gold has already made a major move higher, investors are wise to consider whether we're closer to a top like 2011 than a bottom like a few years ago. More Experts: Stocks & Markets Podcast: Sectors to Avoid With Jay Woods Trader makes bold call with Boeing stock after defense workers strike Veteran fund manager sends urgent 9-word message on stocks "Gold is an asset that should only be bought when nobody wants it. If everyone is buying it, it's probably too late for anyone with a time horizon of less than a decade or longer," said Garner. There's certainly an argument that gold bullishness is widespread, with many talking positively about it as a hedge worth owning. "If you are looking for bearish analyst calls or news, you won't find it," said Garner. "But don't let this detract you from being skeptical." Gold was panned as a "dead dog acting as a drag to portfolios" three years ago, says Garner. Today, she says, "it is considered a must-hold in those same portfolios." In other words, contrarian thinking, akin to buying when everyone is selling and selling when everyone is buying, may make more sense today regarding gold than three years ago. "Just as conventional thinking was misguided then, it might be wrong today," wrote prices risk 'blow-off top' like 2011 first appeared on TheStreet on Aug 16, 2025 This story was originally reported by TheStreet on Aug 16, 2025, where it first appeared.

Veteran analyst sends surprising message on stocks, bonds, and gold
Veteran analyst sends surprising message on stocks, bonds, and gold

Yahoo

time15-06-2025

  • Business
  • Yahoo

Veteran analyst sends surprising message on stocks, bonds, and gold

Veteran analyst sends surprising message on stocks, bonds, and gold originally appeared on TheStreet. The stock market rally has been impressive. Since President Donald Trump paused most reciprocal tariffs on April 9, only days after announcing them, stocks have soared. The S&P 500 has gained about 20%, while the tech-stock heavy Nasdaq Composite is up 27%. Those returns in such a short span significantly outpace the average 10% annual return for stocks since 1928. Stocks haven't been the only winner. Gold has also notched impressive returns this year. The yellow metal has rallied 30% in 2025 as investors have sought to insulate risk amid growing economic concerns surrounding debt and the impact of tariffs on one big disappointment this year: Treasury bonds. They've tumbled, sending bond yields soaring, as global investors have soured on financing America's insatiable appetite for spending. The market action has captured the attention of many, including veteran commodities and futures analyst Carley Garner. Garner has been professionally navigating these markets for 20 years, and her track record includes accurately predicting the stock rally in 2023 and last year's decline in oil prices. Garner updated her outlook on stocks, gold, and bonds, and her takeaway may surprise you. Stocks' rally since the lows in early April likely surprised many, given significant economic risks remain. While inflation has retreated below 3% from over 8% in 2022, price increases over the past years have cash-strapped consumers, causing them to shift spending from discretionary purchases to problem has been compounded by an uptick in unemployment, which has increased to 4.2% from 3.4% in 2023, partly due to higher interest rates designed to crimp inflation. According to Challenger, Gray, & Christmas, U.S. companies have laid off 696,309 workers this year through May, up 80% from one year ago. The situation isn't likely to get much better for workers. While Trump paused many reciprocal tariffs in April, key tariffs remain, including a 25% tariff on Canada and Mexico and autos, a 10% tariff on all imports, and 30% tariff on China (total tariffs on China, including those put in place during President Trump's first term exceed 50%). The remaining tariffs, and potential for more after the 90-day pause expires, could fuel inflation later this year, particularly in retail, which sources everything from clothing to electronics from overseas. The risk of inflation alongside job losses suggests America could go headlong into a period of stagflation or recession. Despite those risks, the S&P 500 and Nasdaq Composite have notched remarkable gains. Investors who quickly sold amid tariff announcements earlier this year have been left behind, and as a result, they're buying every dip to regain their exposure. One major exception? Warren Buffett. The Oracle of Omaha has increased Berkshire Hathaway's cash position, choosing to collect guaranteed fixed income from T-bills rather than leap back into the stock market amid the uncertainty. Exiting the first quarter, Warren Buffett's cash stockpile eclipsed $347 billion, a record, and more than double the levels exiting 2023. The rallies in stocks and gold may continue, but like Buffett, Carley Garner doesn't see the risk-to-reward as overly compelling in stocks. She's also become bearish on gold relative to bonds, given that gold has moved significantly higher and, unlike bonds, doesn't pay dividends. "While I believe the S&P 500 can easily reach 6300 to 6400, the downside risk might be outsized relative to the potential reward," wrote Garner on TheStreet Pro. "Since 1928, the S&P 500 has returned an average annual rate of 10%; however, in recent years, the average return has been abnormally high, at approximately 14%. There is a good chance that, like the dot-com era, we have pulled forward gains and could be on the verge of a 'returnless' market in the coming years." Garner points to a key measure favored by Warren Buffett regarding stock market valuation as evidence that stocks are over their skis. More Experts: Fed official sends strong message about interest-rate cuts Billionaire fund manager sends surprising message on trade deficit Hedge-fund manager sees U.S. becoming Greece "The Warren Buffett Indicator measures the total stock market value vs. the GDP," wrote Garner. "Since 1950, the stock market has only been this overstretched a few other times. Not surprisingly, the dot-com bubble was one of those times. Historically, this indicator has not been the time to hit the gas on risk assets. It has been the opposite." The arguable overvaluation of stocks could mean the risk of a reckoning is high enough to concentrate on other assets. However, gold may not be the best bet, given it's already made a big move higher. Instead, it's Treasury bonds that Garner believes offer the best chance for upside. "There is only one [of these assets] near a two-decade low in valuation: Treasuries," writes Garner. "Except for some forms of real estate, it is the only asset that yields an attractive income stream. Lastly, Treasuries are the least risky asset class in the world but the market is treating the securities as anything but." Garner points out that people were flocking to own bonds with paltry yields only five years ago. Now, they're shunning yields near 4.5%. Many are hesitant to own bonds despite the high yields, fearing that bonds will continue to drop, sending yields even higher, as the U.S. debt load rises. While it's true that lower bond values could mean short-term losses, Garner views the risk of a U.S. default as unlikely, suggesting that those holding Treasuries to maturity will be fine, and pocket healthy income along the way. "Historically, there have been two other instances in history when stocks were as overvalued as they are now relative to bonds. Or, alternatively, bonds were this undervalued relative to stocks," wrote Garner. "Such opportunities have only arisen once every two decades, and they have proven to be significant inflection points in both stocks (the beginning of prolonged underperformance) and bonds (the start of a period of capital gains to enhance interest earned). This metric has been similarly favoring bonds since the initial collapse in 2023, so instant satisfaction shouldn't be expected, but patience will likely pay off."Veteran analyst sends surprising message on stocks, bonds, and gold first appeared on TheStreet on Jun 15, 2025 This story was originally reported by TheStreet on Jun 15, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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