With gold prices and many related equities snapping record highs, BMO chief investment strategist Brian Belski says investors should be cautious about chasing the gold rally in the stock market.
“Much of the recent outperformance is more about momentum instead of bottoms-up company or industry fundamentals,” he wrote in a note to clients on Thursday. “We caution investors from chasing gold stocks at these levels, and believe investors should simply maintain current positioning.”
Bullion futures (GC=F) continued to climb on Friday, heading for a fourth straight weekly gain. The precious metal continues to break all-time highs near US$3,700 per ounce.
COMEX – Delayed QuoteUSD 3,686.40 +12.80 +(0.35%) At close: September 12 at 4:59:57 p.m. EDT Gold stocks have also seen a blistering run in 2025. The iShares S&P/TSX Global Gold Index ETF (XGD.TO), a basket of major producers including Newmont (NGT.TO), Agnico Eagle Mines (AEM.TO), and Barrick Mining (ABX.TO), has climbed nearly 100 per cent year-to-date. The materials sector and gold stocks have been the core driver of strong TSX performance in 2025.
Gold’s appeal to investors has been fuelled by a wide spectrum of factors, including purchases by central banks, U.S. President Donald Trump’s trade war, Russian President Vladimir Putin’s war in Ukraine, and general unease about the trajectory of the global economy.
However, Belski warns the rise in gold prices due to such factors may be long in the tooth.
“We believe recent price momentum has been defined and frankly bullied by macro rhetoric – where dynamics have already begun to change,” he wrote. “In our view, interest rates and inflation, or fears surrounding tariffs, have yet to pan out, let alone become fundamental realities.”