Experts: Gold Pullback Strengthens Bull Market Case
Gold’s retreat from recent record highs has done little to dampen long-term optimism among market participants, with speakers on the Precious Metals panel at the Rick Rule Symposium arguing that the current correction is a normal feature of a healthy bull market rather than the beginning of a sustained downturn.
Panelists pointed to continued central bank demand, rising global debt and shifting investor perceptions of gold’s role in the financial system as the primary forces underpinning the precious metal’s long-term outlook, while suggesting the recent pullback could create opportunities for investors and mining companies alike.
Brien Lundin, publisher of Gold Newsletter, described the current rally as only the fourth gold bull market since gold ceased functioning as a monetary standard in 1971.
According to Lundin, the current cycle has differed from previous bull markets because it was initially driven almost entirely by central bank buying rather than Western investors.
“For the first 18 months or so, central banks drove the bus,” he said, noting that bullion advanced steadily while mining equities and silver lagged because central banks do not purchase those assets.
That dynamic shifted after Federal Reserve Chair Jerome Powell signaled monetary easing during his Jackson Hole speech last year, prompting Western investors to enter the market in force.
As speculative capital returned, gold began exhibiting the sharper rallies and corrections typically associated with a traditional bull market. Lundin characterized the recent decline as the first meaningful correction of the current cycle and argued it should not be viewed as unusual.
“These kinds of corrections are typical,” he said.
“They’re going to come about here and there … We’re going to have furious rallies. We’re going to have really nerve-wracking corrections like this to test your convictions,” Lundin added that he believes the market has likely established a bottom and remains in a longer-term uptrend.
Hear more of Lundin’s thoughts on the trajectory of the gold market in this exclusive Investing News Network interview.
A long term store of value
Peter Grosskopf, chairman of SCP Resource Finance, suggested investors often become too focused on short-term price movements.
Referencing a quote from fellow conference speaker Grant Williams, Grosskopf said, “The currency doesn’t tell you the value of gold. Gold tells you the value of the currency.”
Rather than evaluating gold on a quarterly basis, he argued investors should consider its relationship to expanding global debt, which he believes supports significantly higher prices over time.
Joseph Cavatoni, chief market strategist for North America at the World Gold Council, said the gold market is undergoing a broader structural shift as participants increasingly view the metal as a strategic reserve asset instead of simply a short-term trading instrument.
He noted that while futures markets remain heavily focused on short-term price action, the larger over-the-counter market and growing demand across Asia continue to have an increasingly important influence on prices.
“You’ve got to think bigger. You’ve got to think global,” Cavatoni said.
Demand tailwinds bolstered by geopolitical risk
Addressing gold’s sharp rally earlier this year followed by a subsequent correction, Cavatoni said the initial surge reflected heightened geopolitical uncertainty and speculation surrounding tariffs, Federal Reserve policy and escalating tensions in the Middle East.
In this heightened environment, gold’s safe-haven narrative became overemphasized, attracting speculative buying that ultimately proved unsustainable, added Cavatoni.
“[In] the run-up to a war, you will see an appreciating gold price,” he explained. Once markets began pricing in the economic consequences of the conflict, particularly inflationary pressures from higher oil prices, gold corrected alongside improving clarity around political uncertainty.
Despite that volatility, panelists repeatedly returned to one theme: central bank demand remains the dominant force supporting gold’s long-term outlook.
Cavatoni cited a recent World Gold Council survey of 77 central banks, noting most respondents expect to continue increasing their gold reserves.
According to Cavatoni, gold remains the only reserve asset that offers liquidity without counterparty credit risk while providing diversification amid an increasingly uncertain geopolitical environment.
Lundin agreed, describing official sector purchases as one of two major structural trends supporting gold.
Additionally, Lundin said many central banks are seeking protection from what he described as the “weaponization” of the US dollar while also responding to growing sovereign debt burdens.
“The debt deficits,” he said, “are the primary driver behind everything.”
Grosskopf echoed those concerns, underscoring that governments globally are approaching fiscal limits.
“The one thing that’s universally true about governments is eventually they all run out of other people’s money to spend,” he said.
Changing the perception of gold
Grosskopf went on to explain that he increasingly thinks of gold as his “household currency” rather than measuring wealth in US or Canadian dollars, suggesting more households may eventually begin treating gold as a reserve asset in much the same way central banks already do.
While bullion has significantly outperformed over the past two years, mining equities have yet to fully reflect higher gold prices, a disconnect several panelists described as an opportunity.
For Lundin the mining sector remains highly inefficient because many companies receive little analyst coverage, allowing diligent investors to uncover undervalued projects before broader markets recognize their value.
Calling the current environment a “target-rich environment,” he suggested the recent correction and seasonal weakness have created an attractive entry point for quality exploration and development companies.
Grosskopf similarly described the recent pullback as “healthy and very constructive,” noting that some quality development companies are now trading at roughly half the valuations they commanded only a few months ago.
He emphasized that successful investments require both quality assets and experienced management teams, warning that poor execution can undermine even the strongest projects.
Looking ahead, Cavatoni encouraged investors to move beyond short-term market noise and instead view gold as a long-term strategic portfolio allocation.
“The thing that I think people should reset their minds on is that gold’s global,” he said.
Rather than reacting to day-to-day volatility, investors should consider holding gold over decades, allowing the asset’s long-term appreciation to contribute to overall portfolio performance without focusing on short-term price swings.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
