In the glittering world of commodities, gold has long held a mythic allure, often touted as the ultimate hedge against economic turmoil. Yet, as prices surge to unprecedented heights in early 2026, a chorus of skepticism is emerging from some of the investment world’s most respected voices. Howard Marks, the billionaire co-founder of Oaktree Capital Management, has reignited a debate that challenges the metal’s foundational appeal. In a recent interview, Marks dismissed gold’s status as a reliable store of value, labeling it a form of “self-deception” rooted in collective belief rather than inherent worth. This perspective, drawn from a 2010 memo to clients, comes at a time when spot gold has climbed to around $4,576 per ounce, according to data from India Today, marking a slight dip after hitting fresh records.

Marks’ critique isn’t new, but its timing amplifies its impact amid the current bull run. He argues that unlike stocks or bonds, which generate income through dividends or interest, gold produces nothing—its value hinges entirely on what others are willing to pay. “There’s no fair price for gold,” Marks stated, emphasizing that its appeal is psychological, not analytical. This view contrasts sharply with the fervor driving the rally, fueled by geopolitical tensions, central bank purchases, and fears of inflation. Investors are piling in, pushing year-to-date gains to 65%, as noted in reports from Stocktwits. Yet Marks, known for his memos that dissect market psychology, warns that such enthusiasm could be a trap.

The rally’s momentum shows no signs of abating, with analysts from major institutions forecasting even higher peaks. J.P. Morgan, for instance, anticipates further upside through 2026, driven by sustained demand from exchange-traded funds and emerging markets. Their latest outlook suggests spot prices could test new highs, building on 2025’s record-breaking performance where gold soared amid global uncertainties. This optimism is echoed across the sector, with some projections reaching as high as $5,000 per ounce by mid-year, per insights from LiteFinance.

Skepticism Amid Soaring Valuations

Howard Marks’ reservations about gold extend beyond mere valuation; he compares it to assets like Bitcoin and diamonds, which he also deems lacking in intrinsic value. In his view, gold’s historical role as a store of value is more superstition than substance—a narrative perpetuated by centuries of cultural reverence. This stance has drawn attention, especially as gold’s price trajectory defies traditional economic models. For example, despite rising interest rates in some economies, the metal has continued its ascent, buoyed by safe-haven buying during conflicts in Eastern Europe and the Middle East.

Contrasting Marks’ caution, bullish voices dominate the conversation. Bank of America has hiked its gold forecast to $6,000 by April 2026, citing historical bull market patterns that average 300% gains over 43 months. Posts on X from market watchers, including those tracking institutional sentiment, highlight Goldman Sachs reiterating a $4,000 target by mid-2026, with potential for $3,880 if a recession hits. These predictions underscore a shift: central banks now hold more gold than U.S. Treasuries for the first time since 1996, signaling a broader diversification away from fiat currencies.

The debate intensifies when considering gold’s performance metrics. In 2025, the metal outperformed most asset classes, with a 65% year-to-date increase that outpaced equities and bonds. Analysts at Investopedia point to factors like rate-cut expectations and geopolitical unrest as key drivers, projecting continued strength into 2026. Yet Marks counters that without cash flows or productivity, gold’s price is untethered from fundamentals, making it vulnerable to sentiment swings.

Drivers of the Unprecedented Surge

Geopolitical instability remains a primary catalyst for gold’s rally. With ongoing tensions in key regions, investors are flocking to bullion as a hedge against uncertainty. Recent news from Bloomberg describes how animal spirits in metals markets are fueling the surge, with gold leading the pack. Central bank buying has been particularly robust; institutions like those in China and India have ramped up reserves, viewing gold as a counterweight to dollar dominance.

Inflation fears also play a pivotal role. As global debt levels balloon—U.S. debt alone is a focal point in analyses from X posts referencing mining executives—gold’s allure as an inflation protector grows. Morgan Stanley envisions prices hitting $4,800 per ounce, positioning it as a key portfolio hedge. This aligns with forecasts from BullionVault, which incorporates AI-driven predictions showing upward trends for gold alongside silver and platinum through 2026.

However, Marks’ 2010 letter, revisited in his recent comments, dissects this narrative. He posits that gold’s value is a “collective hallucination,” sustained by faith rather than utility. This philosophical angle resonates with value investors who prioritize assets with measurable returns, yet it’s at odds with empirical data showing gold’s resilience during crises, such as the 2008 financial meltdown or the pandemic-era volatility.

Contrasting Views from Industry Titans

While Marks questions gold’s core appeal, other luminaries offer counterpoints. Warren Buffett, his occasional collaborator, has historically shunned gold, famously calling it unproductive in his 2011 shareholder letter. Yet even Buffett’s Berkshire Hathaway dipped into gold mining stocks briefly in 2020, highlighting the metal’s occasional tactical value. In contrast, figures like Ray Dalio advocate for gold as part of a diversified portfolio, especially in eras of monetary debasement.

Recent market data bolsters the bulls’ case. Citi has raised its three-month target to $5,000 per ounce, as reported by The Economic Times, amid expectations of accelerated ETF inflows. X sentiment reflects this, with users noting Deutsche Bank’s upgraded $4,000 forecast, driven by official demand doubling historical averages. Such projections suggest the rally could persist, potentially reshaping asset allocation strategies for institutional investors.

Marks, however, urges caution, warning that gold’s lack of intrinsic value makes it prone to bubbles. He draws parallels to past manias, like the dot-com era, where hype outran reality. This perspective is particularly relevant now, as retail investors, inspired by social media buzz, pour into gold ETFs, amplifying volatility.

Market Implications and Future Trajectories

The divergence in opinions underscores gold’s polarizing nature. For insiders, the key question is whether the current rally represents a structural shift or a fleeting boom. Analyses from J.P. Morgan lean toward the former, forecasting sustained highs through 2027, influenced by macroeconomic factors like potential Fed policy changes. Warnings about alterations to the Federal Open Market Committee’s structure, as mentioned in some forecasts, add layers of uncertainty that could further propel gold.

On the ground, mining companies are reaping the benefits. Newmont’s third-quarter results last year were buoyed by average prices of $3,539 per ounce, and with JPM predicting $1,500 higher by late 2026, margins could expand dramatically. X posts from mining firms highlight this optimism, with analysts eyeing $5,000 as geopolitical bets and rate cuts converge.

Yet Marks’ enduring skepticism serves as a sobering reminder. In his view, gold’s price is determined not by supply-demand fundamentals but by collective psychology—a fragile foundation in turbulent times. As 2026 unfolds, investors must weigh these philosophical debates against tangible market forces.

Navigating Risks in a Golden Era

Risks abound in this environment. A sudden economic rebound or resolution of global conflicts could deflate the rally, leaving late entrants exposed. Bloomberg’s coverage of the metals surge notes how momentum can reverse if inflationary pressures ease unexpectedly. Conversely, escalating U.S. debt and central bank hoarding, as discussed in posts from precious metals groups on X, could sustain the uptrend.

For portfolio managers, integrating gold requires balancing its hedging benefits with Marks’ critique. Some are turning to derivatives or mining equities to capture upside without direct exposure to bullion’s whims. LiteFinance’s long-term predictions extend to 2030, suggesting gold could remain a viable asset if diversification trends persist.

Ultimately, the gold debate encapsulates broader questions about value in investing. Marks’ voice, amplified by his track record, challenges the status quo, prompting a reevaluation of what constitutes a true store of value in an unpredictable world.

Evolving Perspectives on Precious Metals

As the year progresses, emerging data will test these theses. Recent highs above $4,600, as touted by mining companies on X, signal robust demand, yet Marks’ analogy to “self-deception” lingers. Investors eyeing 2040 forecasts from various sources anticipate gold’s role evolving amid climate-driven resource shifts and digital alternatives like cryptocurrencies.

Industry insiders are also monitoring silver and palladium, which trail gold but show correlated gains. BullionVault’s AI insights predict tandem rises, potentially broadening the precious metals bull market. This interconnectedness amplifies the stakes of Marks’ warnings.

In this dynamic setting, the gold rally of 2026 stands as a litmus test for enduring investment principles, blending timeless skepticism with modern market fervor. Whether it proves Marks right or wrong, the discourse enriches the strategic toolkit of those navigating these golden waters.