To The Moon

The USD depreciated and gold prices rose. Combined with growing investor awareness of US indebtedness, people caught the fever and started buying gold, which in turn drove up demand. Higher prices begot more buying, and the cycle fed on itself

With the pace of cuts decelerating for 2026, and because markets are forward-looking, the previously aggressive easing path was priced out and the USD strengthened. Gold, which had risen on the expectation of rate cuts and a weaker dollar, suddenly became vulnerable. Add in unwinding speculative demand, and gold struggled to defend its levels and began to fall.

And that was all before the Iran war. The outbreak of conflict worsened the outlook for gold. Higher energy prices mean more dollars are needed to transact, boosting demand for the USD and lifting its strength. On top of that, interest rates are now expected to rise rather than decline gradually in 2026, which further supports the dollar and weighs on gold.

No one could have known in advance that the Fed would change direction between 2025 and 2026, which shows how hard it is to make money by prediction. The next best approach is reaction. If you’d sold gold at the first sign of the macro shift, or when prices broke below a technical level like a moving average, you wouldn’t have had to ride them all the way down. Another option is simply to refuse to join in when everyone is queuing up to buy, as they were in December 2025.