The Bank for International Settlements (BIS) has issued a warning about growing instability in global financial markets, pointing to what it describes as a potential “double bubble” in gold and equities. The caution comes as both asset classes continue to surge despite a backdrop of economic uncertainty.
Gold prices have reached unprecedented levels, rising well beyond what BIS considers normal safe-haven demand. The institution suggested that speculation may now be playing a major role in pushing prices higher, rather than traditional factors such as inflation concerns or geopolitical tensions.
At the same time, global stock markets remain strong, with valuations that BIS believes may no longer reflect current economic fundamentals. Slowing growth, tightened financial conditions and ongoing geopolitical risks have not stopped equities from climbing, creating what the organization views as a disconnect between prices and reality.
BIS warned that high valuations in both markets could make the financial system more fragile. If investor confidence were to shift suddenly, the combination of inflated gold and stock prices could lead to sharp corrections. The institution emphasized that such a scenario would pose heightened risks for global stability, urging policymakers and investors to stay alert as market pressures continue to build.
