Precious metals remain the only commodity sector that has confidently held an upward trend. However, in my assessment, the current dynamics of gold are beginning to cause concern: the asset has likely risen too high and risks forming a sustained peak as early as 2026, followed by a reversal in the second half of the year.
The entire picture of the commodity market can be described with one chart: precious metals are the only segment that moved upward and stayed there. In my opinion, other commodity groups are "duds"—they either failed to sustain growth or have returned to levels seen in previous years.
The key point here is the comparison with a historical precedent. The last time gold showed such a high premium relative to the broad Bloomberg Commodity Index was in 1980. That was followed by a multi-year decline. The current situation is eerily reminiscent of that scenario, albeit with an important difference: the macroeconomic backdrop today is different, which only increases the risk of a "normalization" of gold prices relative to other commodities.
On the annual gold chart, a large "red" candle is clearly visible after the record near $5,500 per ounce set in the first quarter. Such a candle is a classic sign of a reversal after a strong rally. If the analogy with 1980 holds, we are in for a prolonged correction.
Special attention should be paid to the relationship between commodities and the stock market. The BCOM (Bloomberg Commodity Index) is holding near new lows relative to the total return of the S&P 500. This means that commodities have only one key driver left for outperformance—a decline in the stock market itself. This configuration creates a "lose-lose" situation for the commodity sector: either stocks continue to rise and commodities lag, or the stock market falls, dragging risky assets down with it.
The main difference from previous cycles, such as 2000, is the dominant performance of gold. The precious metal has significantly diverged from other commodities, and the coming months will test the sustainability of this gap. If gold cannot hold its positions, we will witness a large-scale correction comparable to the one that began after the 1980 peak.
My conclusion: The gold market is overheated, and historical parallels point to a high risk of a reversal. Investors should be cautious: current levels may represent the peak of the cycle, not the start of a new rally. Without a significant decline in the stock market, gold simply has no catalysts for further growth.