Why Gold Is Up

and the SMG bonus is inside!

Author

Pete Tan
November 11, 2025

If you’ve been reading along with me, you’ll remember I flagged the brewing liquidity surge and looming economic cracks in our last newsletter. Well, the dominoes are falling and the gold market is now sending loud signals (breaching $4100/oz)

Here’s what’s going on:

  • The precious-metal markets are reacting to rising systemic liquidity and signals that the U.S. government shutdown is nearing an end. These two forces together are shaping a powerful backdrop for Gold.

  • Because liquidity is abundant and real interest rates are expected to trend lower, gold (a non-yielding asset) is gaining appeal.

  • Furthermore, the prospect of the U.S. government reopening means data will return, uncertainty will shift, and markets are positioning now.

Key data points:

  • Gold recently hit multi-week highs on hopes that the shutdown may wrap up and the Federal Reserve will move toward cuts.

  • The shutdown has already created a liquidity strain via the United States Department of the Treasury’s Treasury General Account drop.

  • Earlier this month, gold pressed toward US $4,000+ per ounce as the shutdown dragged on and the economic outlook looked murky.

🌟 Why This Matters For You

Here’s the “Invest with Pete” breakdown:

  1. Stealth Liquidity Becomes Tailwind
    Remember our earlier talk about liquidity flooding the system? It’s not just about bank reserves, it’s about how that internal cash seeps into purchases, assets and confidence. Gold is one of the first beneficiaries when liquidity is plentiful and interest rates are pressured down.

  2. Safe-Haven Demand Gets a Fresh Boost
    With the government shutdown in sight of ending, uncertainty is easing but hasn’t disappeared. That transitional phase often drives investors into safe assets like gold. With real rates low, gold becomes comparatively more attractive.

  3. Asset Inflation Is Real
    The same forces pushing up risk assets (liquidity, potential Fed easing, fiscal stimulus) also give gold a runway. It isn’t simply a hedge, it’s becoming a part of the broader “money flowing into assets” story.

  4. Timing Matters
    I called this set-up in the last newsletter so if you have a position or are thinking about one, you’re joining this trend more knowingly. Remember: markets often price the scenario ahead of it being obvious.

🔍 Sector Spotlight: Gold

  • The ETF SPDR Gold Shares (ticker: GLD) is a practical way for many investors to gain exposure without owning physical bars.

  • Gold’s path isn’t linear. In fact, short-term pull-backs are likely (as we saw in October).

  • But structurally, the scenario is intact: abundant liquidity, interest-rate pressure, sovereign uncertainty, and a potential reopening of the data flow from the U.S. government.

🎯 Pete’s Takeaway

You don’t have to chase gold at the peak but you do need to recognise the environment that’s pushing it higher.

Here’s the “how to act” in plain terms:

  • Position with intention: If you’re under-allocated to gold or precious-metals exposure, this set-up offers a meaningful case for adding.

  • Manage risk: Don’t treat this as a sure winner. Have a plan, know your exit, and watch for catalysts.

  • Think long term: Liquidity cycles, fiscal pressures and safe-haven demand are macro forces. Gold isn’t just a tactical play, it can be part of a structural hedge or portfolio ballast.

  • Stay alert: The shutdown ending, rate-cut expectations, and data releases will all trigger moves. Be ready for volatility or shorter-term corrections.

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Happy Hunting!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.