Gold's furious rally has cooled off, but these strategists say it's just a breather

The rally in gold has taken a back seat to other areas of the market in the past several weeks, but at least two strategists remain firmly bullish on what comes next. The spot price of gold has surged 29% this year, but the yellow metal has not made a new high in more than a month. That pause has come even as other precious metals, such as silver and palladium , have jumped. XAU= YTD mountain Gold has been one of the top performing assets in 2025. Paul Wong, a market strategist at Sprott Asset Management, told CNBC that this is likely a short-term break in the latest gold rally, caused by reduced fears around tariffs. "I think we're probably consolidating before the summer rally," Wong said. Joni Teves, UBS precious metals strategist, echoed that sentiment in a Wednesday note. "In spite of the pause in gold's uptrend for now, market sentiment appears reasonably unconcerned about the prospect of further consolidation in the near term. High levels of uncertainty around U.S. tariffs, fiscal policy and the Fed's consequent response reinforce the appeal to diversify portfolios, wherein gold stands out as an attractive option," Teves said. Gold is in a multi-year uptrend, boosted by several factors. For one thing, foreign governments and central banks have been buying gold in large quantities in part to diversify away from the U.S. dollar as the reserve currency of choice. Gold is also seen as a defensive asset, which makes it attractive when fears around global growth and the U.S. budget deficit flare up. Notably, the rally for gold this year has come alongside a sharp decline in the strength of the U.S. dollar . On Thursday, the ICE U.S. Dollar Index hit its lowest level in more than 3 years. "The main thing to look at really is the U.S. dollar, which continues to be very weak," Wong said. — CNBC's Michael Bloom contributed reporting.

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