Bond king Bill Gross warns about regional bank 'cockroaches' and gold’s momentum rally

[Bank building on the backdrop from golden ingots, 3D rendering]
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Bond-market legend Bill Gross has warned about the recent rally in gold prices and argued that credit risk concerns that have caused a selloff among regional banks will continue to impact stocks and bonds.

His comments came after gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) and silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) prices reached new all-time highs early this week before sliding on Friday as U.S.-China trade tensions eased, with President Donald Trump noting that a "full-scale" tariff on Chinese imports would be unsustainable. [https://seekingalpha.com/news/4505391-gold-silver-slide-on-heavy-profit-taking-after-trump-reassures-on-china]

“Gold has become a momentum/meme asset. If you want to own it, wait a while [https://x.com/real_bill_gross/status/1979202043853332506],” the Pimco founder said in an X post on Friday as Gold Trust ETF (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]) recorded its first intraday drop after five straight sessions of gains and a YTD rally of ~61%.

Meanwhile, the NYSE Arca Gold Miners Index (GDX [https://seekingalpha.com/symbol/GDX]) headed to its biggest intraday drop since May after a ~7% decline, with Newmont (NEM [https://seekingalpha.com/symbol/NEM]), Barrick (B [https://seekingalpha.com/symbol/B]), and Agnico Eagle Mines (AEM [https://seekingalpha.com/symbol/AEM]) among notable decliners.

“Regional bank 'cockroaches' may continue to affect stocks AND bonds,” Gross said regarding the financial sector, referring to a term JPMorgan Chase (JPM [https://seekingalpha.com/symbol/JPM]) CEO Jamie Dimon used earlier this week to identify the credit risk caused by the bankruptcy of car parts supplier First Brands Group.

“I probably shouldn’t say this, but when you see one cockroach, there are probably more,” Dimon said during the company’s Q3 earnings call on Tuesday [https://seekingalpha.com/news/4505099-bank-fears-spread-with-wider-market-spooked-over-credit-cockroaches], adding, “And so we should—everyone should be forewarned on this one.”

SPDR S&P Regional Banking ETF (NYSEARCA:KRE [https://seekingalpha.com/symbol/KRE]) fell ~6% on Thursday, driven by notable decliners such as Jefferies Financial (JEF [https://seekingalpha.com/symbol/JEF]), Zions Bancorporation (ZION [https://seekingalpha.com/symbol/ZION]), and Western Alliance (WAL [https://seekingalpha.com/symbol/WAL]), which also flagged credit losses.

However, the sector recovered some losses on Friday amid largely positive commentary from banks, and as analysts pointed out, the industry appears to be on a solid footing, and credit risk events could not indicate a broader issue. [https://seekingalpha.com/news/4505263-bank-stocks-retrace-some-of-thursdays-losses-as-investors-nerves-settle]

MORE ON SPDR GOLD SHARES ETF, SPDR S&P REGIONAL BANKING ETF, ETC.

* Gold: A Multi-Year Bull Run Is Now My Base Case [https://seekingalpha.com/article/4830963-gold-multi-year-bull-run-now-my-base-case]
* India Gold Market Update: Festive Shine [https://seekingalpha.com/article/4830950-india-gold-market-update-festive-shine]
* China Gold Market Update: Wholesale Demand Rebounded [https://seekingalpha.com/article/4830948-china-gold-market-update-wholesale-demand-rebounded]
* Gold, silver slide on heavy profit-taking after Trump reassures on China [https://seekingalpha.com/news/4505391-gold-silver-slide-on-heavy-profit-taking-after-trump-reassures-on-china]
* Bank stocks retrace some of Thursday's losses as investors' nerves settle [https://seekingalpha.com/news/4505263-bank-stocks-retrace-some-of-thursdays-losses-as-investors-nerves-settle]