Scotiabank Stays Bullish, Reminds Investors of Gold's Previous 6X Rise

Gold has been one of the strongest performers across global markets this year, lifting more than sixty per cent in 2025, while silver has nearly doubled that return. Miners have also delivered exceptional gains, and naturally, this has sparked a growing debate about whether the move has gone too far. Scotiabank has addressed this concern in a detailed note that argues the gold trade is not finished yet. The bank believes the longer-term forces behind gold are still in place and that the outlook for 2026 remains constructive.

A big part of that view comes from the debt position of the United States. Federal debt near thirty-eight trillion dollars continues to rise without any real sign of slowing. Persistent deficits can undermine confidence in the dollar and create a backdrop where investors look for stores of value outside the traditional system. Gold tends to attract capital whenever faith in fiscal discipline fades, and Scotiabank expects that theme to carry into next year.

The bank also points to an emerging source of demand that has been picking up attention. There has been steady growth in gold-backed stablecoins, which require physical metal to support issuance. While still small compared with global holdings, this is becoming another channel that quietly withdraws bullion from available supply. It also broadens the audience for gold by linking it with digital markets in a way that did not exist a few years ago.

Political risk is also playing a role. Markets remain sensitive to any sign of interference with the US Federal Reserve. Even the suggestion of a shift toward a more politically influenced Fed can weaken trust in the dollar. If the dollar continues to soften, it generally provides a clear lift for gold prices. Trade tensions between major economies have not faded either, and this has kept safe-haven demand intact.

Scotiabank’s broader macro view sees more downside ahead for the dollar. Their economists believe the currency is facing cyclical and structural headwinds. When the dollar loses ground, commodities typically strengthen, and gold often leads that move (although silver has been dominating this year). It is an environment that many long-term holders find attractive.

For investors worried that the rally has already reached its limit, Scotiabank offers some historical context. The run in the late 1970s saw gold climb more than six times and silver almost nine times before momentum faded. Today’s market is not identical, but the comparison helps frame the possibility that this cycle may not be finished. Miners also do not appear overly stretched on valuation metrics, with forward earnings still below levels seen during the 2010-2011 period.