Market Insights: Gold Continues to Glitter

Macroeconomic and Market Developments: 

• North American markets fell this week. In Canada, the S&P/TSX Composite Index closed 2.04% lower. In the U.S., the Dow Jones Industrial Average fell 2.73% and the S&P 500 Index decreased 2.43%. 
• The Canadian dollar was down this week, closing at 71.41 cents vs 71.63 cents USD last week. 
• Oil prices declined this week, with U.S. West Texas crude closing at US$58.81 vs US$60.88 last week.  
• The price of gold rose again this week, closing at another all-time high of US$4,030 vs US$3,881 last week. 
• In the U.S., the ISM Non-Manufacturing (Service) Index fell to 50.0 in September (vs. 51.7 expected), indicating the U.S. service sector largely stalled after months of steady expansion. New orders (50.4) and business activity (49.9) softened from August highs, while employment (47.2) and supplier deliveries (52.6) showed mild improvement. Despite the pullback, services remain more resilient than manufacturing, expanding in ten of the past twelve months. The prices paid index held near 69, pointing to persistent—but stabilizing—cost pressures. Overall, the data suggest a moderation in service activity. 
• Canada’s job market surprised to the upside in September, adding 60,400 positions versus expectations for a small decline, while the unemployment rate held steady at 7.1%. The gains were concentrated in full-time work (+106,000) and led by the public sector (+31,000) and manufacturing (+28,000), offset by a drop in part-time roles (-46,000). Economists called the report a “welcome bounce but hardly a trend,” noting that the three-month average remains negative and overall labor slack persists. Still, the stronger print may delay the Bank of Canada’s next rate cut, with markets now eyeing the October 21st CPI release for confirmation of whether policy easing remains on track.  
• Prime Minister Mark Carney said the upcoming CUSMA renegotiation is unlikely to resolve all trade tensions with the U.S., noting that Washington will likely continue targeting key Canadian sectors with tariffs even after talks conclude. While discussions are set to begin next year, Ottawa is pursuing sector-specific agreements on steel, aluminum, autos, and softwood lumber to secure relief. Carney’s comments follow his White House meeting with President Trump, who reaffirmed plans to maintain tariffs despite Canada’s efforts to preserve broader trade stability. 
• President Trump warned that there is “no reason” to meet with President Xi later this month and threatened a “massive increase” in tariffs on Chinese goods after Beijing moved to restrict exports of rare earths critical to U.S. industries. The escalation follows earlier efforts to ease tensions through tariff rollbacks, but China’s new export controls on rare earth materials and related technologies have reignited trade frictions. Analysts say Trump’s remarks could mark “the beginning of the end of the tariff truce,” raising renewed concerns about global supply chains and economic stability as both sides signal they’re prepared to re-escalate the trade war. 
• Intercontinental Exchange (ICE, Owner of the NYSE) announced a US$2 billion all-cash investment in Polymarket, valuing the decentralized prediction platform at US$8 billion and marking a major step toward mainstreaming event-based markets. As part of the deal, ICE will distribute Polymarket’s event and sentiment data to institutional investors, offering new insights into real-time market expectations. The two firms also plan to collaborate on tokenization initiatives, blending ICE’s market infrastructure and credibility with Polymarket’s innovation in decentralized finance to expand the reach of prediction-based investment tools. 

 

Weekly Diversion: 

Check out this video: Blue Jays Sliding (Diving) into the next round 

Charts of the Week: 

Gold has recently demonstrated notable price momentum in global markets, reinforcing its reputation as a commodity prone to dramatic swings and investor enthusiasm. Gold has had an incredible run with futures extending their price above $4,000/oz today after breaching that level for the first time Wednesday to an all-time high. The following chart from Wednesday illustrates that prices were up more than 20% over the last 35 trading days since August 19. That's one of the strongest runs in history, albeit falling short of several different surges between 1975 and 2011. Overall, this is the fourteenth time that gold has risen at least 20% in that time span without having done so in the prior three months. 

Source: Bespoke Investment Group 

This recent move in gold prices underscores a core characteristic: the market’s sensitivity to momentum effects, which have been observable across decades. When gold surges, it is not uncommon to see short-term retrenchments, as traders and investors take profits after rapid advances. However, historical data suggests that while the initial phase after a spike may see some gains given up, longer-term performance frequently outpaces less-volatile periods, especially at the six-month and one-year marks. The next chart shows roll-adjusted front-month gold futures average returns, which are widely used in performance analysis and benchmarking of commodities, as they allow investors and analysts to measure price movements over time without interruption due to expiration cycles. As we can see, during periods where the front-month gold future prices are up 20% or more over 35 days, six-month and one-year forward returns have far outpaced all periods with returns of 4.28% and 17.32% respectively compared to all periods of just 1.45% and 3.25%.  

Source: Bespoke Investment Group 

For those assessing gold’s potential going forward, understanding these momentum-driven cycles is essential. The asset’s ability to outpace other market segments over time—despite intermittent volatility—makes it a powerful tool for portfolio diversification and risk management. The observed patterns highlight the importance of patience and strategic timing, suggesting that investors may benefit more from viewing gold through a medium- to long-term lens, rather than reacting to short-term fluctuations.

Sources:  Yahoo Finance, First Trust, The Canadian Press, Investment Executive, Bespoke Investment Group

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