Gold, Stocks, and Consumer Confidence: What’s Driving the Market?

Going for gold.

That's what central banks have been doing this year.

Countries added 15 tons of gold in August, and Brazil alone bought 16 tons of gold in September.

Now retail traders don't usually buy and store gold.

Instead they've been buying gold ETFs and miners along with crypto, but they've also been investing in tech stocks which have soared since April lows and led the major averages to.

Records.

Now joining me to weigh in on what we're seeing across markets is Brett Camwell, US investment and options analyst at U.

Brett, good morning and happy Friday.

Thank you so much for joining me.

So US stocks rallying sharply this year with valuations looking quite lofty.

So is this everything rally sustainable or are investors ignoring some of the underlying risks here?

Yeah, you know, thanks for having me this morning, and when we look across the board, we do have an everything rally going on right now.

Whether people want to call it, you know, refer to it as that or maybe the dollar debasement trade.

We're seeing record highs in Bitcoin, gold, US equities.

So there's really a lot of different assets.

This is the year for diversified investors.

But you know that doesn't mean that we can't have pullbacks along the way.

Investors, you know, Maybe overlooking that possibility, but at the same time, I think if we do see that type of pullback really in any of these three asset classes, I think that dip will be bought.

So, you know, investors are excited, maybe we're a little overheated in the short term, but long term I think we still have those catalysts in play to push us higher.

Yeah, and Brett, you just mentioned that debasement trade and as we're looking at gold, trying to hold above that 4000 level, for American viewers out there, can you explain this concept?

Yeah, well, as the dollar weakens, it's going to act as a tailwind for assets specifically with gold, but gold also has other drivers to it too.

I mean, a weaker dollar certainly helps, but lower interest rates help.

Uncertainty about the whether it's about, you know, more recently the government shutdown, but broadly.

Speaking about maybe it's the labor market.

We had the tariff uncertainty earlier in the year, so general uncertainty is also a benefit for gold.

So there's a few different catalysts in play here, as you mentioned at the top, just net buyers from central banks.

Now retail investors are involved with buying more so on the ETF front.

But you know, when you put all of these things together, this is how we get something like a 50% rally in gold, which To not make light of it, it is a massive move.

It's almost, it's the biggest one year rally we've seen in almost 50 years.

So it's not like, you know, we a pullback wouldn't be unexpected at some point along the way, but you know, the main catalysts pushing this forward have been very strong when they're all combined together.

Yeah, and we do also have a lack of US economic data right now with the shutdown rolling into day 10.

So how important is the upcoming earnings season for keeping the rally intact and what are you watching most closely from companies, especially when it comes to the US consumer?

Yeah, that's a great question.

And over the next couple of weeks that question will be answered.

You know, when we were coming out of that tariff sell off in early April, we had earnings start, you know, very soon after with the big banks and the credit card companies.

They told a pretty Reassuring story of the consumer.

They, the consumer is out, they are still spending, they are remaining resilient.

We, we didn't even hear that, we didn't necessarily hear that echoed in Q2.

We heard it reiterated confidently in Q2.

So over the summer management was I'm very confident in the consumer, which I think for investors is an important read through.

So when you're on those conference calls starting next week with the banks and over the next few weeks as we get into the retailers and credit card companies, listen to see how management is looking at retail right now.

How are they looking?

At consumers, if that consumer is remaining resilient, and that's we've also seen that in the data too, retail sales, revised higher GDP, it's been positive around the consumer.

So while there is uncertainty out there around inflation and uncertainty around the labor market, management has remained confident in the consumer, and that is very critical for not only the economic story of going into 2026, but also the earnings story, which has been a main driver of the of the rally we've seen in stocks.

And Brett, finally, we have less than 60 seconds, but investors have learned to buy the dip.

If we see a correction, do you expect retail to step in again?

I do expect retail to step in if we see a dip and not just for the recent momentum we've had in the markets, which I think alone would be enough to bring investors off the sidelines after seeing such a move.

I mean that the Nasdaq's up almost 20% this year, so the momentum alone is enough, I think, to bring investors back in.

But when we talk about those long term drivers, and really there's only a couple that matter, it's earnings growth, lower interest rates from the Fed, and a resilient economy.

If those remain intact.

Institutionals and retail investors are going to step in on this debt.

OK, Brett, we will have to leave it there but thank you so much for joining us on this Friday and as always, thank you so much for your perspective and all of your insights.

Thank you.