The Week in Review: October 27, 2025

All That Glitters is Gold

Among various assets, one unexpected outperformer has been gold. Since the start of the year, the shiny metal has increased by over 50%, easily surpassing the major stock market indexes.

Globally, gold is priced in dollars. A rising dollar has historically provided a stiff headwind for gold. And the opposite is true. A weak dollar has historically been supportive of gold. 

That pattern played out during the first eight months of the year. As the dollar slipped during the first four

months, gold rallied.

But the dollar's stabilization put a lid on gold, at least through the end of August.

A meteoric rise 

Despite a stable dollar, gold has soared over the past couple of months, surpassing $4,000 per ounce for the first time.

Why has the price of gold surged? There are several reasons, including—

  • Purchases of the metal by global central banks, as they gradually diversify away from the dollar.

  • Tariffs and trade uncertainty may also be encouraging some investors to look at gold. Economic uncertainty has historically aided gold.

  • The large federal deficit is viewed as unsustainable. It contributes to economic uncertainty, currency debasement, and investor distrust in traditional financial instruments.

  • Expected rate cuts by the Federal Reserve support gold. In part, gold does not pay a dividend (obviously), and falling rates may make it more appealing.

  • Higher inflation is seen as supporting gold; however, as we’ve observed before, other factors can outweigh changes in inflation. Gold was weak in 2022 despite high inflation. It has surged in 2025, even as the inflation rate has remained relatively steady.

  • Lastly, success begets success. Let’s call it momentum. The run-up in price, especially over the last two months, has encouraged speculators to add to their positions. In other words, it’s FOMO—the Fear of Missing Out.

  • But gold is very speculative and can be volatile. Last week, gold saw its biggest one-day selloff in more than a decade, according to the Wall Street Journal.

Such a decline probably wasn’t surprising, at least in hindsight. But timing a move like that is all but impossible.

Market Summary

Please do not hesitate to contact me with any questions or concerns. 

I hope you have a great week!

Warmest Regards,

Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management

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1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3. The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.

Stordahl Capital Management