A Warning for Gold Bugs: This Rally Won’t Last

The enthusiasm surrounding gold’s big first-quarter rally suggests its shine is set to dull sooner rather than later

Gold investors should enjoy the party while they can. The good times are probably coming to an end.

Bullish headlines following gold’s 16.5% first-quarter surge were in full force last week. CNBC claimed there was still upside ahead following the biggest quarterly rally in three decades. Bloomberg said even the bulls were stampeded by gold’s sharp move. And The Wall Street Journal touted the growing number of bullish bets on the metal.

Such enthusiasm and unanimity suggests gold’s shine is set to dull sooner rather than later.

Gold often thrives as a haven in times of turmoil, or acts as a hedge against inflation. Devotees love pointing to negative interest rates around the globe as evidence that has recently made gold glitter more than usual.

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Go very gently this rally is rolling over, so now it is a question of just where it will come to rest before the next leg up kicks off.

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