Peter Boockvar: Gold Dropped Below Four Thousand Because It Is Being Treated Like an AI Stock
Peter Boockvar, chief investment officer at OnePoint BFG Wealth Partners and editor of The Boock Report, sat down with Kitco News at the New Orleans Investment Conference and delivered a clear warning. The S and P 500 has become one idea, and that idea is artificial intelligence. Investors should be reassessing their exposure, he said, because the market is very much riding on one idea.
That concentration showed up in gold. On October 30 the metal fell more than 120 dollars and traded below four thousand dollars. Boockvar called the move forced selling. Gold traded in a very unusual tight correlation with the S & P 500. In his words, gold is treated like an AI stock today, which it is not. The two big headwinds that had pressured gold earlier in the year, rising real rates and a strong dollar, are starting to shift, but the metal is still being priced as if it belongs in the same basket as semiconductor and cloud computing names.
The AI trade has now become a factor for the Federal Reserve. Boockvar noted that Kevin Warsh himself has acknowledged the cost of capital and the infrastructure buildout. If the weakness continues into the December meeting, the Fed will have no choice but to take it into account when deciding whether to raise rates. He described the September hike as little more than a tweak. At the same time he pushed back on the idea that the central bank will simply rescue equities. I urge investors not to make buy and sell decisions based on what they think the Fed will do to save the situation, he said. History shows rate cuts during earlier bear markets did not stop the declines.
Boockvar also highlighted the circular financing inside the AI complex. It is similar to dominoes, he observed. Fractures are already visible beneath the surface, and the market is trying to determine whether those cracks will connect. Big Tech spent 207 billion dollars on capital expenditures in the third quarter, nearly double the year earlier figure, yet the rate of change is what matters. If projects are postponed or cancelled, the chain reaction will hit tools, services, and ultimately high income consumer spending. That, in turn, feeds back into growth and into the Fed’s calculus.
He extended the discussion to bond markets. Japan’s policy shifts matter for U.S. yields. France is showing bond market stress. Record Treasury issuance still needs buyers, and a sharp slowdown in the AI trade could push the deficit higher. For retirees, the classic 60/40 portfolio faces new questions. Boockvar continues to favor energy stocks as one area that is not dependent on the single AI narrative.
The interview makes the case that both equities and gold are currently being driven by the same concentrated trade. When that trade cracks, the forced selling in gold may reverse, and the metal can once again trade on its own fundamentals rather than as an AI proxy.
