The Gold and AI Rallies Expose a Major Rift in the Market

Gold has rallied firmly past $4,000 per ounce, while artificial intelligence has beenpropping up the stock market. (Getty Images)

Key Points

• Gold prices have surged past $4,000 per ounce on waning confidence in the global financial order.
• The rally in gold is attributed to factors like rising U.S. debt, a weakening dollar, geopolitical conflicts, and central bank purchases, which could exceed 1,000 tons this year.
• Artificial-intelligence stocks continue to rally, with the six largest megacap tech stocks contributing to approximately half of the S&P 500’s 35% gain since April.

This year’s massive rally in gold , which has lifted bullion firmly past $4,000 per ounce, offers a mirror image for investors tracking a similarly head-scratching surge in artificial-intelligence stocks, which have powered the S&P 500 to more than 30 record highs in 2025.

One is about trust. The other is the complete opposite.

The AI trade wobbled only modestly on Tuesday, with one of its key players, Oracle , falling 2.5% following a report of thinning margins in its cloud computing division.

The stock traded back in the green Wednesday, alongside a host of AI peers, despite increasing concerns from the periphery that the recent wave of dealmaking among the sector’s leading lights is creating a circular “house of chips” of vendor financing and equity-for-sales arrangements.

Investors seem happy to trust the calm assurances of people like Advanced Micro Devices CEO Lisa Su, who called her company’s partnership with OpenAI a “virtuous, positive cycle in how we build out this big vision” of AI computing, in a recent interview with Bloomberg.

Gold investors are a bit less serene.

With U.S. debt topping $37 trillion, trade deals written and torn up on a recurring basis, and the dollar suffering its worst annual decline since the 1980s, many are finding the foundations of the global economic order shifting under their feet in real time.

Gold prices at last check traded up 1.4% to $4,059.10 per ounce.

Adding in the existential risks of conflicts in Europe and the Middle East, as well as increasing concerns for the fiscal probity of the world’s biggest economies, and it’s easy to see how gold has re-established itself as the safe haven of last resort in its march past $4,000.

Ole Hansen, head of commodity strategy at Saxo Bank, said gold’s ongoing rally, which has lifted bullion prices by around 53% so far this year, “reflects a deeper shift in investor psychology and global capital flows.”

“Gold’s rally has become a mirror of waning confidence in the old financial order,” he added. “For decades, investors treated U.S. Treasuries as the global risk-free benchmark. Today, the market’s message is subtler: ‘risk-free’ and ‘trust-free’ are no longer synonymous.”

Investors might not trust the stewards of fiat currencies around the world, but they are, for the moment at least, still happy to follow the leaders of the world’s biggest AI companies.

But that might be more out of necessity than belief. For all the talk of a bubble forming in AI investments, investors can’t afford not to remain tethered to the market’s most-powerful force. The six biggest megacap tech stocks are responsible for around half of the 35% gain the S&P 500 has booked since early April lows.

There might be a bubble, and it one day might pop, but losing money by betting on something that may not happen for another two years isn’t going to satisfy a fund manager’s boss or his myriad clients.

Gold, on the other hand, has a lot of reasons to keep on rising, and just as many to prevent it from falling.

Central bank purchases, which could top another 1,000 tons this year, are largely one-way investments that don’t find their way back into the market. The same is true of purchases in China, the world’s biggest market, where consumers are hedging a property market collapse with gold bullion.

AI stocks could represent the best of free-market capitalism: an innovative idea, supported by private investment that ultimately delivers corporate profits and economies of scale, and rewards those who bet on it.

Gold, on the other hand, seems to be warning of capitalism weaknesses: It’s vulnerable to abuse from political leaders, reliant on natural incentives to guide capital flows, and based on a bond of trust and responsibility—and it rewards those who recognize them.

We may soon see which view is correct.

Write to Martin Baccardax at martin.baccardax@barrons.com