Gold to $5,000? Strategist Warns a Drop to $3,000 Comes First
The precious metals rally was one of the biggest stories in the third quarter. Despite a sizeable pullback, bullish sentiment and global ETF flows suggest gold could surge past $5,000 per ounce. According to The Kobeissi Letter, gold-backed funds have logged eight consecutive daily inflows — the longest streak since October 2025. Yet, the Bloomberg Intelligence Senior Commodity Strategist Mike McGlone argues the rally is running on borrowed time. Rather than a launchpad to record highs, he sees conditions resembling the stretched euphoria of the 1980 and 2011 peaks. In his view, the market is setting the stage for a potential retreat toward $3,000 from above $4,300 today. “Markets usually don’t die in complacency,” McGlone said in the latest interview. “They die in euphoria. And there’s just so much bullishness for gold.” The clash between surging physical allocation and a resurgent risk-free rate leaves metals vulnerable as tighter Federal Reserve policy exposes broader imbalances. The 5% Hurdle The 10-year Treasury yield reaching 5% offers the highest guaranteed return in decades, creating a formidable barrier for non-yielding assets. “When you have that 10-year note guaranteeing
The precious metals rally was one of the biggest stories in the third quarter. Despite a sizeable pullback, bullish sentiment and global ETF flows suggest gold could surge past $5,000 per ounce. According to The Kobeissi Letter, gold-backed funds have logged eight consecutive daily inflows — the longest streak since October 2025. Yet, the Bloomberg Intelligence Senior Commodity Strategist Mike McGlone argues the rally is running on borrowed time.
Rather than a launchpad to record highs, he sees conditions resembling the stretched euphoria of the 1980 and 2011 peaks. In his view, the market is setting the stage for a potential retreat toward $3,000 from above $4,300 today. “Markets usually don’t die in complacency,” McGlone said in the latest interview. “They die in euphoria.
” The clash between surging physical allocation and a resurgent risk-free rate leaves metals vulnerable as tighter Federal Reserve policy exposes broader imbalances. The 5% Hurdle The 10-year Treasury yield reaching 5% offers the highest guaranteed return in decades, creating a formidable barrier for non-yielding assets. “When you have that 10-year note guaranteeing 5%, the most in almost 25 years, that’s a headwind for all non-income-producing assets, most notably gold and silver,” McGlone said. The ratio of spot gold to the Bloomberg Long Treasury Bond Index has climbed to 120 from a 1987 base of 100.
When 10-year yields bottomed near 50 basis points in 2020, that ratio stood near 30. “It was a time to buy gold and sell bonds. It might be the opposite now,” he said. “The time to buy gold was when the Fed was cutting, and we got 50 basis points on the 10-year note.
S. market capitalization sits at $82 trillion, roughly double the $40 trillion in public debt. “The problem right now with all the metals, they are stock puppets,” McGlone said. ” A standard equity mean reversion risks dragging precious and industrial metals down in tandem.
2 times that of the S&P 500, the most since 2007. “When gold gets excited, it’s usually best for investors to be cautious. I expect it to be trading in a range between 3,000 and 5,000 for a long time,” he noted. “The sooner it goes down to 3,000, so I can get bullish, the better.
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