09.12.2025 08:40
The Bank for International Settlements (BIS) stated that the rapid rise in gold and stocks has deviated from historical norms, indicating that both are in the "explosive zone." The institution is urging investors to be cautious of the possibility of a sudden price correction.
The Bank for International Settlements (BIS) reported that gold prices, which have recently approached record levels, no longer serve their traditional "safe haven" role and have instead transformed into a speculative structure. The institution described the simultaneous strong upward trend of gold and stocks as "an anomaly not seen in the last 50 years."
BIS Head of Monetary and Economic Department Hyun Song Shin stated in the quarterly market assessment report, "The price of gold has risen alongside other risky assets and deviated from the historical pattern of acting as a safe haven. Gold has now become a much more speculative asset."
WHY ARE PRICES RISING?
According to data reported by Bloomberg, gold bullion has gained approximately 20% in value since the beginning of September. BIS noted that part of this increase was driven by investor interest triggered by "overly optimistic" news about gold in the media.
The report highlighted two key factors supporting the rally in gold prices:
- The strengthening of expectations for interest rate cuts has increased global risk appetite.
- The weakening of concerns about economic slowdown has directed institutional investors seeking alternatives towards gold.
During the same period, U.S. stock markets also entered a strong upward trend, recovering from the lows experienced after President Donald Trump announced tariffs in April. Particularly, technology and artificial intelligence-focused stocks became the locomotive of the rally; however, it was noted that concerns about valuations have increased.
"EXPLOSIVE ZONE" WARNING
BIS announced that gold and stocks have entered what the institution calls an "explosive zone" simultaneously. This rare simultaneous price behavior in history strengthens the risk of sudden and sharp corrections.
The report warned, "After an explosive period, a bubble typically bursts with a sharp and rapid correction." BIS recalled the gold bubble of 1980 as an example but emphasized that not every correction may occur at the same speed, and sometimes it can extend over a long period.