Gold All Over, Finished, Kaput After $3500 Big Top
Thursday, 6/19/2025 12:03
Word is, gold investing made a big top this spring...
SO GOLD INVESTING has peaked and the price topped out at $3500,
says Adrian Ash at BullionVault, expanding on Part 1 of this mid-2025 review of gold investing's $3500 peak.
That's what analysts at US financial giant Citi now reckon.
"We have already seen the highs for gold," they say, predicting a drop through $3000 in 2026...
...and calling the top a mere 8 weeks after brokerage StoneX's analyst Rhona O'Connell said
"the high is in" following 22nd April's print 1 cent below $3500 per Troy ounce.
Gold investing is also over-crowded and over-valued.
That, at least, is what fund managers who missed out on gold's steep 2024 and 2025 gains think according to Bank of America's monthly surveys, calling
gold the "most crowded trade" in the markets in April, May and now again in June.
Beyond their bias and envy, they might have a point, too. Because a glance at gold's price chart shows its nasty habit of setting big ugly tops.
And gold shot very high, very fast, this spring, to that top at $3500.
Check out 2020, for instance.
Amid the investing chaos of the Covid Crisis, gold briefly topped $2000 per Troy ounce for the first time in history.
But the precious metal then waited 2.5 years to really take and hold that level, with its 6th August peak
not beaten until the end of 2023.
Like 2020, gold had
set a big top in 2011 as well. Only more so.
Spot prices peaked on 6th September at $1920 per Troy ounce as the global financial crisis Western banking crash morphed into a Western government debt crisis.
Cue a rush to buy bullion. Cue a wait of 9 years to break even.
But that was nothing compared to gold's really big top of three decades before.
Rising over 250% in 12 months, New Year 1980 saw gold prices double from just 6 weeks earlier.
It
peaked on 21st January at $850 per ounce as resurgent inflation, the Soviet invasion of Afghanistan and the Iranian hostage crisis crushed the price of US Treasury bonds.
"We're in
World War 8 if you believe the market," as one futures broker put it that day to the
New York Times.
But anyone rushing to buy gold got to repent at leisure. For nearly 28 years, in fact.
And then, just to rub it in, the move which finally got those 1980 buyers back to break-even promptly fell over...
...making a fresh top on 15th March 2008, just
above $1000 gold, which took 18 months to recover and beat.
That irony, however, pales next to gold's first big top of its post-fixed-price era.
Three years after Richard
Nixon shot the gold-backed Dollar down dead on the floor, August 1974 saw President Gerald Ford sign
Public Law 93-974, allowing US citizens to invest in gold bullion for the first time in 3 decades by abolishing the ban imposed by FDR's "confiscation" of the Great Depression.
The fun would begin on New Year's Day 1975. So gold prices raced higher, almost doubling in 12 months as US banks and dealers rushed to stockpiles coins and retail bars in anticipation.
But peaking at $197 per Troy ounce on 30 December, gold then lost $10 the next day, eve of the bullion buying bonanza everyone expected.
Gold's big top of December 1974 then took 888 trading days to beat, a full 3.5 years.
Do gold's eager new investors from spring 2025 now face a similar fate? Or worse?
Nobody knows anything, remember. Patterns are for wallpaper.
But one thing linking all 5 of the big tops above is the way that they ended. In that they ended.
- After December 1974's spot-market peak near $200 per ounce, gold dropped 4.1% on its monthly average price in January '75;
- January 1980's near-three-decade peak of $850 was followed by a month-average drop of 1.5% in the February;
- Gold's $1000 top of March 2008 saw the price drop 6.1% on April's month-average;
- September 2011's spot-market high of $1920 was followed by gold trading 6.0% lower across the October; and
- August 2020's peak at $2075 was followed by gold losing 2.4% on its month-average basis that September.
April 2025 proved different. Because May's month-average gold price rose 2.2% to a fresh record.
More closely, and on a week-end basis, none of gold's 5 prior big tops saw it set a fresh Friday record anytime soon. Not until it got back towards setting a new daily peak, in fact.
But again, Tuesday 22nd April 2025 stands in contrast. Because it has now been followed by 3 fresh weekly close highs (Friday
9th May at $3324 gold, then
23rd May at $3342 per ounce, then
13 June above $3435).
Still, sure, whatever. This spring may well have marked the top for this move, if not this decade.
I don't know any more than Citi's analysts or the assorted fund managers talking to BoA. And for Rhona O'Connell at StoneX, gold's "muted response" to the Israel-Iran conflict starting a week ago "underscores [her] view that the market is crowded and the high is in."
But if so, then gold has just done something it's never done before after setting a big top:
Continued rising on its underlying uptrend.
What of the fundamentals? More to come in Part 3...
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