In recent discussions on “Varney & Co.,” Eddie Ghabour, co-founder of Key Advisors Wealth Management, highlighted harsh realities in the current investment landscape, calling bonds “dead money” while advocating for a shift towards gold, suggesting that investors should maintain at least 10% of their portfolios in the precious metal. His remarks come as gold prices have reached unprecedented heights recently, although the market experienced a slight retreat on Thursday.
Gold has long been revered as a safe haven during times of economic uncertainty. Over the past year, its price surge can be attributed to growing anxieties surrounding the U.S. economy, stemming from tariff-induced inflationary pressures, a weakening labor market, and increasing anticipation of a possible Federal Reserve rate cut. The price of gold had surged to an all-time high of $3,578 on Wednesday, following disappointing job opening statistics that bolstered the likelihood of adjustments in Fed policies.
To illustrate gold’s recent performance, an investor who purchased a 1-ounce gold bar at Costco for $2,495 a year ago would see that investment valued at approximately $3,557 today—marking a remarkable gain of about 42%, or over $1,000. However, gold prices fell slightly on Thursday, representing a pause in this upward trajectory.
David Meger, director of metals trading at High Ridge Futures, emphasized that with the market already pricing in expectations for rate cuts, the forthcoming monthly jobs report will serve as a crucial indicator for future movements in gold and currency values. Additional data released on Thursday revealed more significant-than-expected increases in new jobless claims as the labor market shows signs of strain.
Standard Chartered has forecasted further price increases for gold, driven by escalated demand for this safe asset amid ongoing uncertainties related to tariff policies and concerns regarding the Federal Reserve’s independence. President Donald Trump has stirred controversy by attempting to dismiss Fed Governor Lisa Cook, referencing allegations of mortgage fraud. Cook has contested her potential removal, arguing that it does not satisfy the criteria for a dismissal “for cause.”
Concerns about Fed independence have been fueled by Trump’s previous threats to terminate Fed Chair Jerome Powell, who was appointed in 2017. Although Trump has since moderated his stance, the market remains sensitive to his declarations, particularly with Powell’s term extending to May 2026.
Globally, central banks are also increasing their gold holdings, which has further bolstered gold as an investment. For instance, Poland’s central bank governor, Adam Glapinski, announced plans to propose raising the target allocation for gold in reserves from 20% to 30%, signaling a strong endorsement for gold as a strategic asset in the face of economic uncertainties.
