Gold December futures opened at $4,710.10 an ounce on Tuesday, up 0.3% on the day and at a three-month high. A year ago the same contract was almost 40% cheaper. A month ago it was nearly 16% cheaper. The metal that is supposed to be the boring corner of a portfolio has been one of the best trades of 2026.
And yet the people who trade it for a living spent the week telling anyone who would listen to calm down. “Buying high to hope for short-term higher is a tough strategy,” said Darrell Fletcher, managing director for commodities at Bannockburn Capital Markets. That is a gold desk, on the record, warning you off chasing gold higher. Worth reading twice.
How we got here
Three forces have been shoving the price up. Geopolitical worry in the Middle East keeps a bid under safe-haven assets. Inflation refuses to behave, and gold is the classic hedge when your cash is losing purchasing power. And the US Treasury doubled the size of its long-dated bond buybacks, a move that unsettled the very market meant to be the world’s safe asset. When Treasuries look wobbly, gold looks better by comparison.
The numbers on the run are genuinely large. Up 6.7% in a week. Up 15.8% in a month. Up 39.9% on the year. Back in late January the trailing one-year gain was an eye-watering 95.6%, so the pace has cooled, but the direction has not turned.
The catch
Gold pays no dividend, no coupon, nothing. Its entire return depends on someone paying more for it than you did. Thomas Winmill of Midas Funds put positions in bullion, coins and ETFs squarely in the “speculative” bucket, noting that commodity prices hang on factors that are “unpredictable, and in some cases, unknowable.”
Alex Tsepaev, chief strategy officer at B2PRIME, was blunter about the job gold should be doing. It “should not be seen as a driver of supercharged returns,” he said, framing it instead as a stabiliser in a diversified portfolio. In plain terms, ballast, not the engine. That is a useful reframe when a chart is going straight up and your instincts are screaming at you to pile in.
What to actually do with that
If you already hold gold, this rally has done its job and then some. Rebalancing, meaning taking some off the table so a single asset does not swell into an outsized chunk of your portfolio, is the unglamorous discipline that keeps you honest. If you hold none and you are tempted right now, you are buying near record levels on a momentum trade, which is exactly the scenario Fletcher warned about.
The structural story is real. Central banks have been steady buyers for years, which is genuine demand and part of why the floor under the price keeps rising. That supports the long-term case. It does not promise the price cannot fall 15% next quarter, because it can, and gold has done considerably worse than that in its history. (Not investment advice.)
Did you know: gold is up roughly 40% over the past year while paying zero interest or dividends, so every cent of that gain has had to come from the next buyer agreeing to pay more than the last one did.
Sources
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