BIS Issues First Alert in 50 Years Over Global ‘Double Bubble’ Risk in Gold and Stocks
The central bank of central banks warns synchronised surge in gold and S&P 500—fuelled by AI hype and geopolitical tension—reflects dangerous market fragility.
The Bank for International Settlements (BIS) has sounded the alarm over an unprecedented “double bubble” risk, noting that the prices of both gold and global stocks have surged simultaneously for the first time in at least 50 years.
The rare warning from the BIS, often referred to as the central bank of central banks, questions the resilience of the current “risk-on” environment across global financial markets.
While the stock market has been propelled by the hype surrounding Artificial Intelligence (AI) technology, gold prices have soared by 60% this year, putting 2025 on track to be the metal’s biggest annual price leap since 1979.
Gold’s New Role
The synchronised surge has forced a re-evaluation of gold’s traditional role as a safe-haven asset.
“Gold has behaved very differently this year from its normal pattern. It is clear that gold is increasingly taking on the characteristics of a ‘speculative asset,’” stated Hyun Song Shin, Economic Adviser and Head of Research at the BIS, in the institution’s final annual report.
The fundamental concern for the BIS lies in the synchronisation: if both markets were to suffer a correction simultaneously, investors would have few places to seek refuge.
This scenario also raises questions about the impact on central banks and global reserve managers who have been aggressively adding gold to their reserves.
