Big banks bet on gold rally as metals channel meme stock
It’s all over for doughnuts and cameras as social media’s retail investors set their sights on a new favourite investment meme.
Precious metals’ start to 2026 has been nothing short of a rollercoaster. Gold rose 65 per cent last year, hitting multiple fresh records as geopolitical tensions flared.
Investors flocked to the traditional safe-haven asset amid concerns around international trade and rising conflict.
But as the New Year hangover came around, a new branch of investors were taking notice and quickly brought the shine off gold and silver.
Gold plunged all the way below $4,500 on Monday as the metals rout deepened, a drastic fall from $5,601 in the days previous.
Meanwhile silver, which has recorded ten moves of over five per cent in either direction over the last month, has been buoyed by investors rushing into exchange-traded funds (ETFs), which are funds that track a specific index.
On 26 January, individual investors poured nearly $171m (£125m) into iShares silver trust – an ETF tracking the metal.
It comes amid a spark in activity across social media platform Reddit, which plays a central role in picking the next meme-stock phenomenon.
“Gold’s latest behaviour is a concern,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
She added whilst gold had traditionally served as a protection against risks it was now behaving “like a risky asset – worse, at times like a meme stock”.
“It will be interesting to see whether the latest slump helps temper gold’s meme-like symptoms and restores its reputation as a boring, low-risk safe-haven asset. Because today, that description no longer fits.”
Ozkardeskaya noted most diversified portfolios have exposure to gold, meaning the volatility could hit a wide variety of profiles – a prospect she labelled “disquieting”.
What is a meme stock?
Meme stocks are equities which see a sudden and enormous surge in volume and value, driven largely by sheer enthusiasm across retail investors on social media platforms.
Often FOMO trade – “fear of missing out” – plays a major part with users across platforms like Reddit, X and discord getting caught up in the viral frenzy.
Tech firm Go Pro became the poster child for the meme stock era after retail traders piled cash into the action-camera pioneer after a nostalgia surge. In a July 2025 surge, the stock rocketed over 200 per cent from lows of $0.70 to a photo finish of as much as $2.10 in just a few trading sessions, forcing a major squeeze on short-sellers who bet against the firm’s survival.
Krispy Kreme’s sugar rush July journey into the meme sphere was led by a coordinated “glaze phase” rally across social media after retail investors noticed the stock was heavily shorted. During the period, mentions of Krispy Kreme on trading forums jumped by over 3,500 per cent as the stock rallied more than 40 per cent in a few days.
Whilst Go Pro and Krispy Kreme’s fate eventually turned sour with the pair down 16 and 14 per cent respectively over the past six months, big banks are doubling down on their gold bets.
JP Morgan has tipped gold to reach $6,300 by the end of 2026, which would require a gain of near 28 per cent from its current level around the $4,900 mark.
“Even with the recent near-term volatility, we remain firmly bullishly convicted in gold over the medium-term on the back of a clean, structural, continued diversification trend that has further to run amid a still well-entrenched regime of real asset outperformance vs paper assets,” bank brokers wrote in a note.
Meanwhile, Deutsche Bank has reiterated on its ‘positive’ outlook and $6,000 price target for the yellow metal despite the sharp correction.