Gold is trading more like a trending stock on Reddit than a haven for investors, and may have topped out after its record surge, billionaire investor Bill Gross told Business Insider.

The yellow metal fell as much as 6.3% on Tuesday, suffering its worst drop in 12 years. The drop coincided with an even steeper 8.7% decline in spot silver prices.

The moves suggest investors are taking profits after gold and silver’s record-setting gains this year, and perhaps acting on Gross’s latest warning.

After cautioning investors in a Friday post on X to “wait awhile” if they wanted to buy gold, the Wall Street billionaire known as the “Bond King” told Business Insider in an email that gold was “exhibiting characteristics of meme and momentum stocks.”

Gross, who cofounded PIMCO and grew its flagship Total Return Fund to $270 billion over nearly three decades, meant that gold has soared in price partly because of hype and speculation, making it more volatile and vulnerable to a sudden, sharp decline.

Gross told Business Insider that gold was still “sensitive to short-term interest rates,” referring to the metal’s tendency to rise in price when borrowing costs drop.

That’s because falling rates make gold more appealing to investors relative to cash and bonds as their yields decline. Lower rates can also accelerate inflation, making gold a more attractive hedge against rising prices, and signal economic trouble, feeding demand for gold as a safe investment.

Gold has also soared this year because central banks have been buying historically large amounts of it due to “policy uncertainty,” Gross said. Trade wars, military conflicts, and political discord have fueled doubts about the outlook for markets and the global economy.

Gross told Business Insider gold would ‘hold up better’ than stocks

Gross told Business Insider that gold would likely “hold up better than stocks” in the weeks ahead, adding that a disappointing earnings season could rein in the bull market. But he said there might be a price pullback after two strong months of trading, creating “perhaps a better time to buy.”

The veteran investor said “momentum, policy, and perhaps interest rates will be dominant factors” in gold’s price trajectory.

He added that Treasury yields are pricing in a drop in the Fed Funds rate to around 3% so a “very bearish economy/earnings report would be needed to drive it further absent momentum influences.”

Gross has previously called out social media hype and FOMO-fueled speculation in markets.

In 2022, he described meme stocks AMC and GameStop as “lottery tickets,” saying they could rise but were highly volatile and their valuations weren’t supported by fundamentals. He said that each buying frenzy ends with a “musical chair, me-first exit” from the stock du jour.

The bond billionaire said last summer that Tesla was behaving like a meme stock, given its ” straight-up price action” despite “sagging fundamentals.”

Gross has sold options on GameStop, AMC, Trump Media, and other meme stocks, betting they’ll expire worthless and he could keep the premiums without paying anything.