While gold took a hit on Tuesday, metals trading has outpaced artificial intelligence on Wall Street this year, with even the latter driving the overall stock market to record levels. Gold surpassed the $4,000 per ounce threshold in early October and just this week hit a high of over $4,300. It’s now up more than 50% this year. Not only that, but silver is trading near record levels and is up over 60%. This is despite the easing of trade tensions between the US and China leading to a slight decline in metal prices in both countries. President Donald Trump said Monday that he expects to reach a “very fair and very nice” agreement with Chinese President Xi Jinping in South Korea later this month. Precious metals rallied in 2025 due to concerns over global trade, expectations for Federal Reserve interest rate cuts and a weaker US dollar. But the scale of these gains is unusual for gold and silver, especially when stock markets are strong. The Nasdaq 100 index is up more than 19% this year, and the S&P 500 index is up more than 14%, both new records this year due to the AI investment boom. The product also outpaced AI giant Nvidia’s more than 34% rise. “The market is now starting to look at gold as an asset class a little bit differently,” David Wagner, head of equities at Aptus Capital Advisors, said in an interview with CNBC. “It’s no longer just used as a simple way to hedge currency or hedge your portfolio.” @GC.1 Mountain Gold Futures YTD, YTD Instead, investors see gold futures as a scarce asset as Wall Street gains momentum in the “low currency” trade. The trade refers to investors lowering the value of the U.S. dollar by hedging government borrowing and money printing and moving into gold and other assets. “People want to own risk assets,” Wagner said. “Given the current debt situation and the currency depreciation on an annual basis due to inflation, people want to own real assets.” “There has been a bit of a shift in thinking about gold over the last few years,” he added. Gold has outperformed the broader market since the peak of the tech bubble in 2000, but the move really became clear in 2022, when the US joined other countries such as the European Union to freeze Russia’s central bank reserves in response to Russia’s invasion of Ukraine. “That woke up the world and said, ‘Hey, let’s double check how much US dollar reserves we have. Maybe this is a good opportunity to reduce that exposure,'” said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners. This move means central banks will begin purchasing large sums of gold not only in 2022, but also in 2023 and 2024. The pace has only accelerated this year, following President Trump’s decision several months ago to impose “reciprocal” tariffs on a number of countries. .DXY YTD Mountain ICE US Dollar Index, Year-to-date The US dollar has fallen in 2025, facing some pressure, particularly in the wake of growing uncertainty surrounding President Trump’s tariff plans. These have prompted foreign buyers to diversify away from the currency and turn to gold as an attractive alternative. Gold’s share of global reserve assets reached 24% in the second quarter of this year, the highest level since the mid-to-late 1990s, according to Deutsche Bank data. “In the last few months, all the individual investors and institutional investors who were short in ’22, ’23, ’24, now they’re seeing prices going up and they’re like, ‘Okay, let’s get back in,'” Boockvar added. “We’re seeing that in the increase in gold holdings in ETFs, adding to what was already going up.” What’s next? Boockvar believes that other metals, such as gold and silver, are “probably going into a period of rest” in the short term after their strong gains this year. He still views the trade as a buy, but cautioned investors to prepare for additional purchases in case of a pullback. Spot gold and spot silver had already lost momentum on Tuesday, dropping more than 5% and 8%, respectively. “It has expanded too much, especially in relation to the moving averages,” he said. “I’m still bullish, it’s still very long-term, but I acknowledge that we’re probably ready to go into the digest phase, and the stock market is probably the same way,” said Ross Mayfield, investment strategist at Baird. “We tend to kind of bet that AI trading will have more legs,” he said, because of the many growth factors — the story around AI, the revenue potential of AI companies, the use cases for the technology, and the speed at which AI models are improving. “It’s not that gold trading can’t continue, but gold is kind of a…known element,” he said. “There are times when it works out very well, but people know what gold is (and) traditionally what the story behind the gold story is, but AI still has this kind of untapped advantage.” There are others on Wall Street who take a more bullish view on gold from here. Louis Navellier of Navellier & Associates is one of them. He cited a lack of trust in central banks and governments around the world, including France, as the reason for the recent jump. “With the global interest rate collapse underway and deflation concerns widespread, central banks will have to continue to cut interest rates,” said the company’s founder and chief investment officer. “The US is an oasis from many of the world’s problems, but gold is the best oasis in the midst of turmoil. That’s why I expect gold to continue rising.”
