The price of gold has skyrocketed in recent months, explains Nicky Shields, director of precious metals investment strategy at MKS PAMP Group, in conversation with DW.<\/p>\n\n
\u2018It is an indicator of the loss of confidence in governments and institutions.\u2019 The question, he adds, is whether a relatively small market such as gold funds can absorb the current flood of capital. <\/p>\n\n
Based in Geneva, MKS PAMP Group is one of the key players in the global precious metals industry. It processes gold, silver and platinum into bullion, coins and products for the jewellery and industrial sectors, and offers investment options for institutional and private clients. <\/p>\n\n
\u2018Paper gold\u2019: the market’s star performer
In the third quarter of 2025, between July and September, physically backed gold ETFs recorded record inflows of $26 billion. North American investors led the movement, with $16.1 billion, while European funds also bought heavily and had their second-best quarter ever, with $8.2 billion. <\/p>\n\n
Gold ETFs track the price of the metal without investors having to purchase and store bullion. Many hold physical gold in vaults, earning them the nickname \u2018paper gold\u2019. <\/p>\n\n
Unlike equity funds, gold ETFs contain only one component \u2013 gold \u2013 and therefore do not diversify risk. They are not permitted in Germany, although they are in most European countries. <\/p>\n\n
However, gold ETCs (Exchange Traded Commodities) are authorised. These are listed securities that replicate the performance of commodities such as gold.<\/p>\n\n
The \u2018gold rush\u2019 continues
Among these factors, he mentions expectations of lower interest rates in the United States, doubts about the future independence of the Federal Reserve, concerns about the strength of the dollar, and the possibility that US trade policy could cause further turbulence in 2026.<\/p>\n\n
The Bank even raised its forecast: it estimates that gold could reach $4,600 by the end of 2026.<\/p>\n\n
In October, gold reached a historic high of over $4,350 per troy ounce \u2013 an internationally standardised measure. Since then, it has stabilised at around $4,115 (as of 25 November). <\/p>\n\n
In September, investment bank Morgan Stanley recommended that its clients modify the classic portfolio structure\u201460% equities and 40% bonds\u2014to incorporate at least 20% in gold-linked products.<\/p>\n\n
Mike Wilson, chief investment officer, told Reuters that gold is the ultimate \u2018anti-fragile asset\u2019, capable of offering protection in times of uncertainty. The 60\/20\/20 model would, according to him, be a \u2018robust shield against inflation\u2019. <\/p>\n\n
The Financial Times described the phenomenon as \u2018gold-plated FOMO\u2019 (\u2018fear of missing out\u2019): \u2018Gold’s biggest bull run since the 1970s is being fuelled by investors’ fear of missing out on gains and concerns about rising inflation.\u2019<\/p>\n\n
Cryptocurrencies also want their share
Based in El Salvador, Tether is now the world’s largest digital asset company and issues the stablecoin USDT, a stable crypto asset that normally maintains a parity close to 1 dollar. On its platform, it promotes investments linked to goldcoins, digital currencies backed by gold. <\/p>\n\n
The company has become the largest single owner of bullion outside central banks and holds reserves comparable to those of countries such as South Korea, Hungary and Greece.<\/p>\n\n
For the MKS expert, the situation shows that even gold \u2013 traditionally a safe haven \u2013 is becoming an object of speculation.<\/p>\n\n
\u2018Over the past two months, a real bubble has formed in the financial markets, not only in gold and silver, but also in US equities and the artificial intelligence sector,\u2019 says Shields.<\/p>\n\n
There are several causes for this \u2018overheating\u2019. \u2018The Fed is lowering rates, even though we are not in recession. That injects more liquidity into a system that may not need it,\u2019 he explains. \u2018That’s why we’re seeing inflated valuations in AI-related assets, US equities and a growing bubble in gold and silver.\u2019 <\/p>\n\n
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