A warning has been issued by a Bloomberg strategist, suggesting the gold rally is transitioning from a store of value to a speculative bet, with multiple technical indicators signaling the bull market may be nearing its end. On March 17, Bloomberg commodity strategist Mike McGlone highlighted that by the end of February, the premium of the gold price relative to its 60-month moving average had surged to its highest level since 1980. Furthermore, its 180-day volatility reached 2.4 times that of the S&P 500, marking a 20-year high. McGlone views this price level as "the best-case scenario a bull market can achieve" and draws comparisons to the historic peaks seen in 1980 and 2011. McGlone further emphasized that if the gold price lacks sustained support from a 1970s-style inflationary environment or extreme geopolitical events, the risk of a correction towards $4000 per ounce is increasing. Despite the US dollar index declining for two consecutive days this week, the spot gold price remained largely unchanged, hovering near $5000 per ounce.

**Overstretched Valuation Compared to 1980 and 2011 Highs**

Mike McGlone compares the current situation to the gold surge between 2001 and 2011. Back then, after gold hit a high of $1921 in 2011, that level was not surpassed until 2020. The current pace of the gold price increase has already exceeded that previous rally, thereby amplifying the pressure for a reversion to the mean. It is noteworthy that the "gold rush" of 1979-1980 occurred against a backdrop of high US CPI inflation nearing 15%, whereas the current US CPI stands at just 2.4%. McGlone argues that such an extreme surge in the gold price within a relatively moderate inflation environment is itself evidence of overheated valuation. The ratio of the gold price to its five-year moving average has climbed to 1.6 times its historical high in 2026. The only historical precedent for reaching this level was precisely during the price peak period of 1979-1980. Additionally, the ratio of the S&P 500 to the gold price fell to 1.32 on March 13, showing a trend of convergence towards 1. McGlone points out that a continued decline in this indicator suggests gold's strength relative to stocks may have reached its limit. More alarmingly, a rare divergence has emerged between gold's high volatility and the stock market's low volatility. Gold's 180-day volatility is 2.4 times that of the S&P 500, a new high since 2006, while stock market volatility remains at extremely low levels. McGlone believes that once stock market volatility increases and the gold rally subsides, gold's previous strength could paradoxically become a constraint. In other words, gold's rise itself might signal impending pressure on all assets, particularly the stock market.

**Gold-to-Oil Ratio Hits Extreme Level, Mean Reversion Pressure Mounts**

By the end of February, the gold-to-WTI crude oil price ratio surged to 79. Historically, levels exceeding this have only occurred under extreme circumstances, such as in April 2020 when oil prices turned negative. As of March 13, this ratio remained high at 51, while its 100-year historical average and mode are both close to 20. McGlone indicates that the ratio between gold, this ancient store of value, and the most important industrial commodity nearing a historic high could be a sign of a peak in gold prices. The next major move in the commodity markets might be a reversion of the gold price towards its mean. Regarding oil, McGlone suggests that although tensions involving Iran and related geopolitical shocks could trigger a brief spike in oil prices, such supply shocks are typically unsustainable. This is because high oil prices incentivize increased supply from the Western hemisphere, led by the United States. If tensions ease and support from the oil side weakens, it would further increase the pressure on gold to retreat towards $4000. McGlone concludes that 2026 could potentially form a multi-year peak for gold, mirroring the historic highs of 1980 and 2011.