Gold has climbed back above $4,600 an ounce, its highest level since May, after rising from $4,000 just a month earlier. Central banks continue to stockpile the metal, and Motley Fool analyst David Dierking says the bullish case for gold remains the more cogent one.
Gold has surged back above $4,600 an ounce, its highest level since May, after declining over most of 2026. The metal has jumped from $4,000 just a month ago, rewarding investors who kept buying through this year's pullback.
Central banks keep adding to reserves
A 2026 survey from the World Gold Council found that central banks have purchased around 1,000 metric tons of gold annually over the past four years, roughly twice the average pace of the prior decade. More than 80% of the central banks surveyed expect their gold reserves to be moderately or significantly higher within five years. A separate 74% expect their dollar-denominated reserves to shrink over the same period.
That shift comes as the U.S. national debt stands at $40 trillion, with no sign of the government moving to shrink its deficits. Dierking writes that continued central-bank buying signals lower confidence in dollar stability, at least in the near term.
A less attractive entry point, but still a buy
The jump from $4,000 to $4,600 means gold offers less value than it did a month ago. Still, Dierking says the current environment likely makes it a solid longer-term buy, though he cautions investors to manage their expectations at these levels.
He points to two ways to gain exposure: the SPDR Gold Shares ETF (NYSEMKT: GLD), the largest gold ETF, which carries a 0.40% expense ratio. The iShares Gold Trust Micro ETF (NYSEMKT: IAUM) is cheaper, with a 0.09% expense ratio. He suggests investors could consider a 5% portfolio allocation to hedge against fiscal uncertainty and geopolitical risk.
The bearish case, however, is that both pressures could ease. If the government pulls back its deficits or the Iran war reaches a resolution, the dollar could strengthen and erode some of the demand now flowing into gold. Dierking says he still finds the bullish case more cogent, even though some of that upside may already be priced in.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
