Gold is down sharply, but Cowen says this correction was expected and doesn’t mean the long-term trend is over.
Key Points
Key Highlights:
- Gold’s drop in 2026 was anticipated, but the long-term outlook remains bullish.
- Stocks have been underperforming gold since 2022, despite strong narratives like AI.
- Current setup is similar to 1973 and 2008:
Key Highlights:
- Stocks break down vs gold
- Recession risk rises
- Gold corrects but later recovers and makes new highs
- No confirmed recession yet, but:
Key Highlights:
- Labor market is weakening
- Risk increases if stocks continue falling
- We are likely in a late business cycle, which favors gold over stocks and crypto.
- Bitcoin and altcoins have also been weak vs gold, so short-term comparisons can be misleading.
- Gold’s role is not to avoid drops, but to hold value better during weak macro conditions.
Final Takeaway
This looks like a normal correction, not the end of gold’s bull trend. If the cycle weakens and money printing returns, gold is likely to benefit again.
