As gold prices drove past $4,200 an ounce to hit a record high Wednesday, economist Mohamed El-Erian noted what he called the surprising nature of its climb.
Spot gold hit a record $4,217.95 at one point and gold futures landed a bit higher, Reuters noted.
"And just like that, gold is trading above $4,200 an ounce," El-Erian, a Wharton School professor and Allianz chief economic advisor, said on X.
"Gold's steady march from one record high to the next isn't surprising. As I’ve noted before, this rally is powered by fundamental factors, both specific and general, that are becoming more deeply entrenched," he wrote.
"What is surprising, however, is the linear nature of its ascent, as such conditions typically attract (in-and-out) short-term speculation. This rally has been smoothed by a broader market environment where rampant risk-taking has sent many other assets to record highs, keeping short-term speculators engaged and happy," he added.
Last week, El-Erian wrote that gold's record-setting rally appeared to represent an attempt by some investors to "respond to what they perceive as the ongoing fragmentation of the global economic and financial order.” He noted that the S&P 500, Nasdaq, Russell and other indexes also were trading at or near record highs.
Consistent buying by some central banks is being reinforced by growing institutional and retail allocations, along with "a more volatile speculative overlay," he wrote last week.
Credit: MSC/Preiss via Wikimedia Commons
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