Gold’s All-Time High: Expensive or Cheap?

Unlike stocks or bonds, gold produces no income or growth; its purpose is to preserve value over time.

When real rates turn negative and currencies weaken, this lack of yield becomes less of a drawback, as the cost of holding gold falls.

In gold terms, the index has fallen roughly 25% from its 2021–2022 peaks, returning to levels last seen in 2020.

Determining whether gold is expensive or cheap requires comparing it to other assets and their fair value, a far easier task for bonds or equities than for commodities.

This article explores how gold can be evaluated and where today’s price fits in the broader picture.

The Historic Lens

Adjusted for today’s dollars, that peak equals roughly 3,670 dollars per ounce. Gold broke through that barrier, climbing above 3,790 dollars for the first time, officially marking its highest real price ever.

This move has pushed gold into uncharted territory.

The ETF Flows Lens

According to the World Gold Council, gold ETFs saw 47 billion dollars of inflows in the first eight months of 2025:

• North America: Leading demand
• Europe: Catching up amid political risk
• Asia: Steady growth in local demand

With total ETF holdings at just 255 billion dollars in a 300 trillion dollar global system, even small reallocations move prices sharply.

To gauge this sensitivity, we modeled scenarios where a small share of capital shifts into gold ETFs while central bank buying stays steady:

The Stress Test Lense

What happens if investors shift just a fraction of their capital into gold ETFs while central bank demand remains steady?

Even a 0.5% move could nearly double ETF demand, pushing gold to levels once considered extreme.

The model excludes variables like supply and macro betas, which would widen the range further.

The Extreme Scenarios Lens

Exploring the outer edges to better understand the center.

The Old Peg, The New Peg

As BRICS nations seek to reduce reliance on the dollar, gold is quietly regaining influence as a reference point in trade and reserves.

A full-scale dedollarization - a thought experiment, not a forecast - could imply gold above 10,000 dollars per ounce, a theoretical ceiling if gold reclaimed a meaningful part of its historic monetary role.

Bitcoin

Bitcoin’s rise as “digital gold” introduces a new factor in safe-haven flows.

In extreme crises, some capital that once went entirely to gold may split with Bitcoin, potentially tempering gold’s upside.

Its influence remains uncertain, shaped by regulation, adoption, and trust.

Over time, Bitcoin may become a secondary beta to gold, absorbing part of the flight-to-safety flows, or, if confidence falters, disappearing from the equation altogether.

Technical Lens

• Gold has broken out of a months-long consolidation triangle, signaling strong bullish momentum.
• The breakout projects a measured move target near 3,825, which is now being tested.
• Price action remains well above the 20-day moving average, but the RSI above 70 highlights overbought conditions and potential for a short-term pullback.
• A decisive close above 3,825 could open the way toward the 3,900–4,000 zone, while 3,635 now serves as key support.

Gold has moved beyond historical reference point, where past patterns offer no guidance. If this momentum continues, the question isn’t just whether gold has peaked,

but whether it’s quietly reclaiming its role as both a modern hedge and a timeless store of value.

We will continue to monitor capital flows and reserve allocations closely, as even small reallocations can create outsized effects in today’s fragile environment.