The Real Reason Gold Dropped: It Is Becoming The World's 'Neutral Asset' - Peter Boockvar

Peter Boockvar argues gold’s recent pullback reflects a shift in how investors are treating the metal: less as a crisis hedge and more as a “neutral asset” in a market where equities are making fresh highs and real yields remain elevated. The Kitco setup highlights the contradiction of gold falling about 12% even as geopolitical risk persists, alongside the S&P 500 at all-time highs and inflation still running at 3.8%. The discussion is positioned around the idea that strong risk assets, higher bond yields, and relatively firm real returns are drawing capital away from bullion. Boockvar’s framework implies that gold is not currently being rewarded for macro uncertainty in the way it has been in past cycles, despite the broader backdrop of inflation pressure and strained real incomes. For traders, the key near-term question is whether gold continues to trade as a defensive hedge or remains range-bound as a portfolio diversifier with limited urgency bids. The setup keeps focus on real yields, equity momentum, and any escalation in geopolitical or macro stress that could force investors back into gold allocations.