Monday 08/December/2025 – 05:52 PM
The Basel-based Bank for International Settlements (BIS), in its latest quarterly report, revealed that retail investors were the ones who led the recent bull run in gold prices, pushing gold bullion out of the traditional safe-haven pattern and becoming an asset closer to speculative assets.
The report indicated that this rise, which has reached about 20% since the beginning of September, is partly due to trend-following investors seeking to exploit the media hype surrounding gold, and the price of gold has thus exceeded its historical pattern to become an increasingly speculative asset, according to Hyun Sung Shin, head of the monetary and economic affairs department at the bank.
Rare synchronization with stocks and entering the explosive zone
Gold’s advance came amid expectations of lower interest rates, which strengthened public appetite for risk. At the same time, stock markets continued to rise, driven in particular by technology stocks and artificial intelligence companies, despite growing concern about exaggerated valuations.
The Bank for International Settlements said the past few quarters are the only time in at least the past 50 years that gold and stocks have entered what it described as the explosive zone simultaneously.
The bank warned that after the bursting phase, the bubble usually bursts with a sharp and rapid correction, citing the case of gold in 1980, noting that correction periods may be prolonged.
Government debt and bond abundance
In another context, the Bank for International Settlements, after repeated warnings of financial budget pressures around the world, pointed out that many advanced economies issued huge debts between September and November, and the resulting abundance of government bonds led to an improvement in spread relationships.
Hyun Sung Shin said: You were supposed to pay additional fees for lending to the government, and this is called the interest spread. This spread no longer exists, and this has encouraged hedge funds to engage in relative value trades with interest rate swaps.
