By Ahmad Assiri Research Strategist at Pepperstone
September 11, 2025:
Gold is clearly the trade of the year. Emerging market central banks have been gradually increasing gold as a percentage share of their total reserves as the dollar’s purchasing power has given up 10% YTD and not to mention policy uncertainty and the massive pressure on the Fed to ease even if arguably running ahead of the data beyond September FOMC meeting.
With gold now having low correlations to both the SPX and fixed income, the metal has cemented its role a true diversifier for multi asset positioning to adopt to the new global financial regime unlike post-GFC to Covid era when gold was for the too conservative too boring investors and institutions as the metal in that decade underperformed SPX nearly by 70%.
Post-covid and post-Russia invasion to Ukraine, the new regime is largely different than last decade. Since 2022, the world began its steady re-accumulation of gold led by central banks and since it’s been on a structural climb with gold gaining more than 100% in the period and 2.4X S&P 500 gains.
To zoom in to a shorter term positioning, I strongly believe the backdrop of gold trade is intact and still has potential for further upside tactically and on the long run. Over the past two weeks, gold has posted considerable gains nearing double digit hence a new consolidation range is needed, to me as for now it seems too hot to chase, too hot too short for traders and short term positioning. Much of the Fed’s easing cycle is priced in by now as the immediate ‘feed to gold model’s factor’. Pullbacks have been limited and met with strong buying flows and that makes gold too hot to short.
On a tactical horizon, possible levels below $3,600 could offer cleaner entry range as stretched positioning washes out