Gold’s Selloff Isn’t the End of the Bull, It’s Another Great Buying Opportunity, Says Rosenberg

11/3/2025 7:44:43 PM	medium term cautious down	20 days later	-2.21%	+1.10%

1/22/2026 9:10:23 PM	short term down	5 days later	-0.58%	+0.58%

11/26/2025 3:32:50 PM	medium term down	20 days later	+3.83%	-3.83%
8/22/2025 6:46:15 PM	medium term sharp down	21 days later	-5.64%	+8.46%
8/20/2025 10:34:54 PM	medium term cautious down	20 days later	-6.88%	+3.44%

Six months ago David Rosenberg told this audience to buy gold, which ran up to north of $5,500 before pulling back. He also predicted a recession and that AI spending and stock market wealth effect would not hold. Now gold has pulled back, labor market is cooling, AI names have wobbled. The debate is how close we are to that reckoning.

Jeremy

David Rosenberg

The gold bull is still alive. The correction was margin-call related, similar to post-Lehman 2008. This is the 12th correction since the secular bull began in 1999. The thesis is predicated on central banks structurally rebalancing reserves away from USD and toward gold, a process probably only halfway through.

Nothing goes in a straight line. Gold bottomed at $250 in Dec 1999 with the Washington Agreement. When the stock market corrects, people want to buy; when gold corrects, they panic. The World Gold Council survey shows central banks will continue expanding gold holdings. Supply expands ~1%, demand from central banks runs 2-2.5%, leading to higher prices over time.

China just imported the most gold in over two years, up 76% this year. Western leverage money was selling, China was taking physical metal. Does that mean the bull market is transferring from paper holders to stronger hands?

Jeremy

David Rosenberg

Yes, that's exactly what happened. The weak hands/strong hands fund flow dynamic is playing out. The central bank diversification story remains intact. The share of USD in global reserves (~60%) is far above the US share of global trade (~20-25%), while gold in central bank reserves fell from 70% in 1980 to 10% in 1999 and hasn't mean-reverted.

The day central banks do a reverse Washington Agreement and put a moratorium on buying, my thesis changes. Gold has been behaving well despite a stronger dollar and higher real rates. Just think what happens when the dollar reverses and when we find out Wars is not going to raise rates.

How did the S&P 500 become the thing holding everything up?

Jeremy

David Rosenberg

We have the highest concentration of equities on household balance sheets ever: 73% of financial assets. Only 7% is in bonds. Real personal disposable income is negative 1.1% YoY, but consumer spending is up 2%+ because of the equity wealth effect. The personal savings rate has collapsed from 5% to barely 3%.

If households were forced to live within their means, consumer spending would be negative 1.1% and we'd be talking about a recession. The equity wealth effect is the only thing propping up spending.

Are we living in the world of the Greenspan put?

Jeremy

David Rosenberg

Not anymore. Every Fed chairperson's first move since Arthur Burns in the 70s has been a rate hike. Wars is different—he cut the dot plot, reduced press statement words by 62%, and cut his press conference short. He could be the first transformational Fed chair since Volcker. The Fed put strike price for Wars will be different.

Bernanke admitted in a 2011 Washington Post editorial that QE was to boost the stock market. Powell ended up being conventional. Wars has already shown he's different. The market is pushing him to raise rates, but every rookie Fed chair faces a destabilizing event in their first year—look at Greenspan in '87, Bernanke in '07.

Does the data drag them to cut? What does the rate path look like?

Jeremy

David Rosenberg

The next move will be a cut, not a hike. Oil prices have retraced 80-85% of the runup. Market-based inflation expectations (5-year breakeven) are at 2.27%, the low for the year. The Fed is talking hawkishly because they're still shamed by their bad call on transitory inflation in 2021-22.

This time is different from 2021-22. The quit rate is falling, which has a 75% correlation with wages 6 months ahead. There's no evidence of broadening through the pricing system or feeding into wages. The Fed has been known to pivot—in 2018 they hiked 4 times and the dot plot called for 2 more hikes in 2019, but they cut 3 times.

What is the one data point that proves you were right? Wage growth, breakevens, core services, job openings, real disposable income?

Jeremy

David Rosenberg

Inflation is about rate of change, not levels. The rate of change in inflation will be coming down. The whole reason the Fed became more hawkish was the war and fear of a supply shock impacting core inflation. But oil prices have come back down, so we don't need that debate anymore.

The Fed focuses on core ex food and energy because core is sensitive to demand conditions. Food and energy gyrate due to supply. The AI spending boom is the sole source of vitality, sapping resources from old economy capex which is in recession. Beneath the veneer, there's more fragility than meets the eye.

What is the real condition of the Canadian economy? Inflation just printed its highest since 2023, but it's basically gasoline.

Jeremy

David Rosenberg

The Canadian economy is flat. When you strip out energy and do a proper core-core adjustment (removing travel services, airlines, delivery services that are joined at the hip to energy), underlying inflation is running at 1.6%. The Bank of Canada is trying to preserve credibility after the transitory mistake.

The Bank of Canada talks about the economy operating under excess supply (positive output gap), which is inherently disinflationary. Healthcare insurance inflation is global and almost a de facto tax hike, not demand-driven. It leads to compression in real incomes and consumer spending.

Is the competitiveness gap with the US fixable, or is it a structural decline no rate cut solves?

Jeremy

David Rosenberg

We've been in structural decline for more than a decade. The biggest economic crime was when Trump cut the US corporate tax rate from 35% to 21% and Canada never responded. Canada's top marginal corporate rate is still ~26%, 5 points higher than the US. Capital goes where it's treated best.

Canadian companies are moving into the US. We have no population growth, so the supply side is almost as weak as demand. The Bank of Canada has only one blunt tool—interest rates. It can't cut taxes or stimulate productivity.

What should people actually do? You point to Buffett sitting on cash, Dimon loading up on treasuries. For a regular person, how do you rank: cash, durations/bonds, bullion, miners, defensive?

Jeremy

David Rosenberg

Keep beta low. My model portfolio has a Sharpe ratio of 1.2 and beta of 0.4. 50% is in equities (prefer Asia, especially China, for positive equity risk premium). The other half is bonds (US treasuries, Canada, Australia). It's a barbell between commodity inflation and service sector disinflation.

I'm a bull on commodities because we're coming out of this war understanding security of supply, inventory building, hoarding—that's a new secular theme providing a higher floor for the commodity index. The link between commodities and CPI is loose. Services dominate CPI and are disinflationary due to a cracking labor market.

Is the mistake owning no commodities because they fear recession, or owning the wrong commodities chasing yesterday's inflation trade?

Jeremy

David Rosenberg

If we get a bad recession, commodities will go down, but by less than in the past because buyers understand the theme. This is a 3-5 year thematic call, not tactical. I'm not advocating buying the S&P 500 with 10 names accounting for 40% of the index.

I wrote my first gold report in early 2010 when gold wasn't even at $1,000. I don't get graded day-by-day. I'm not a momentum trader—I enjoy taking profits. Rebalance when thesis hasn't changed but price action has.

Gold mining companies are trading as if gold was still around $3,000. Is that where the real upside is? Do we hit juniors?

Jeremy

David Rosenberg

My model portfolio is all ETF-based. It's split between physical bullion and miners. Miners have more upside in a bull market. We're still about half where we were last year, so the next move is probably building that position further. The thesis hasn't changed, just the price action.

I'm not licensed to name names. I don't like company-specific risk. I'd rather own a sector or sub-sector for diversification.

After this run, correction, stronger dollar, and hawkish Fed, do you still say buy gold? What would make you turn bearish?

Jeremy

David Rosenberg

What would make me turn bearish is the first central bank that says 'I'm done'—the inverse of the Washington Agreement. Gold's physical characteristics never change. The 20-year bear market from 1980-1999 was only because central banks diversified out of gold into USD. That extreme is now being corrected.

Real rates have gone up, the Fed is talking hawkishly, the USD has momentum—but I don't think any of this is sustainable. There's so much leverage in the system they can't raise rates without precipitating a crisis. Every rookie Fed chair faces a destabilizing event in their first year. Gold is a hedge against instability.

SignalTube