Current Gold Rally Indicates Low Confidence in the System
For Nicky Shields, the current gold rally, which has seen prices “explode” in recent months, is an indication of “very low confidence in the system.” There is less trust in the government, less trust in the functioning of society, according to the head of precious metals investment strategy at MKS PAMP Group. The question now arises as to whether the relatively small gold fund market can absorb the current flood of capital.
Gold Market and Its Players
MKS PAMP Group, based in Geneva, is one of the most influential players in the global precious metals industry. It processes gold, silver, and platinum into bars, coins, and products for jewelry and industrial companies and offers investment products for both institutional and private investors.
“Paper Gold” is the Favorite of Investors
According to the World Gold Council, global assets under management in so-called gold exchange-traded funds (ETFs) rose from $472 billion to $503 billion in October – an increase of 6%. In October alone, inflows amounted to $8.2 billion, well above the previous annual average of $7.1 billion. In the third quarter of 2025, physically backed gold ETFs saw record inflows of $26 billion. Gold ETFs track the price of gold without investors having to purchase and store physical gold bars themselves.
Gold Rally to Continue
Market analyst Martin Siegert of German regional lender Landesbank Baden-Württemberg (LBBW) expects the gold rally to continue. Many of the key pro-gold arguments remain valid, and inflows into gold ETCs are likely to remain intact. He expects U.S. interest rates to fall further, raising further questions about the future independence of the Federal Reserve and the stability of the U.S. dollar.
Gold as an “Anti-Fragile Good”
The previous all-time high for gold was reached in October this year at over $4,350 per ounce. Since then, the price has stabilized at around $4,115 per ounce in November this year. US investment bank Morgan Stanley even recommended that investors change their portfolio structure and make gold a “core component”. Instead of investing the traditional 60% in stocks and 40% in bonds, about 20% of investments should go into gold products.
Crypto Enters the Gold Business
But it’s not just capital inflows into gold ETFs that are driving the gold rally. According to Reuters, the US company Tether also plays a major role. Tether is now the world’s largest digital asset company and is based in El Salvador. It issues the Tether stablecoin (USDT) – a type of cryptocurrency designed to maintain a stable value, often by pegging it to an external asset such as a fiat currency like the US dollar.
Speculation in the Gold Market
MKS expert Nicky Shields believes the commodity, long considered a safe haven, has itself become the target of speculation amid the "overheated" gold market. Over the last two months, it has been in a very bubble-like area, but not just in gold and silver, but also in US stocks and AI stocks. The market is kind of overheated. For Shields, the “overheating” has several causes, including the fact that the Federal Reserve has cut interest rates even though the U.S. economy is “not in recession.”
