Wood Sees Gold Opportunity in AI-Driven Market Uncertainty

Jefferies' Global Head of Equity Strategy Christopher Wood believes investors should begin rebuilding exposure to both gold and gold mining stocks, suggesting that the recent weakness could mark a pause in a much larger structural bull market.

The precious metal surged to record highs earlier this year before suffering a sharp correction as investors reassessed the outlook for inflation, interest rates, and geopolitical risks. However, Wood sees the current pullback as an opportunity rather than a warning sign.

He notes that concerns over artificial intelligence-driven investment could eventually face the same fate as the technology bubble more than two decades ago, drawing comparisons with the dot-com collapse. According to Wood, if credit conditions begin to deteriorate and corporate investment slows sharply, market expectations could swing rapidly away from higher interest rates towards monetary easing by the US Federal Reserve.

Such an environment has historically been supportive for gold. The World Gold Council believes current gold prices largely reflect a moderate economic growth, cooling but still elevated inflation, and limited additional central bank tightening.