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**TL;DR:** Rates are staying high. Gold priced in continued inflation + rate cuts + financial doom. Warsh isn’t cutting and 10y yield is increasing. Will continue to fall.
**Position:** Short 3 GC contracts. Notional value at current price \~$1.2m
**Exit:** Cover if rate cut or rates drop. Exit at 200w.
https://preview.redd.it/muhrmpvo7l8h1.png?width=1708&format=png&auto=webp&s=94fc2bc1d63ed8f7cceec55ebbcc02601426d45e
**Longer BS (why I’m right)**
Gold has another 30-40% more to drop from here. What drives gold prices? Fear of currency debasement, fear of inflation, fear or war, and fear that the government isn’t going to do anything to stop those things.
Gold is a slow moving machine, not a meme stock. It follows huge bull and bear cycles if you zoom out your chart farther than 15 minute increments. We just left the bull.
Gold has been on a huge bull run since 2022 when inflation blew up. Fed raised rates through it but many feared it would continue due to years of low rates, increased global unease (Russian war, etc), and having idiots at the helm. Buying gold as a hedge for disaster and fear of economic insolvency has been the play since the ‘60s.
At the end of 2025 prices came to a head with Trump screaming about cutting rates, fear of AI crash, and the dollar weakening.
As much as I don’t think the world is in a perfect place, I believe the doomers have mostly been wrong. The Fed finally got inflation “under control” and real rates remain elevated. Warsh isn’t about to cut into inflation (even if big T wants him to, good thing). So now gold holders aren’t thinking the end of the world as we know it, they are thinking that 4.5% 10y Treasuries are looking good. This is the first time we have had “real yields” consistently over 1% since 2009 (rates - inflation).
If you hold gold you are losing out on a sure bet yield over inflation, many large gold buyers and institutions would rather have the guaranteed yield.
CTA firms (trend followers who do mostly time series momentum trading) have surely exited their gold long positions. Gold has lost 200d, has gone through a death cross, etc. Many people on here think technical trading is stupid, but there are huge firms that use technical signals to trade momentum across futures. When something loses its big moving averages, there is mechanical selling.
**Other BS (why I could be wrong)**
This ain’t your grandma’s gold. Central banks and foreign governments have been price insensitive gold buyers for a while. It’s an insurance scheme against currencies, war, debt crises, etc. Their buying puts a floor on how low gold can go. It’s not going to crash to 0.
Inflation could jump past rates and we could enter a stagflation scenario, which historically has been quite good for gold.
**Silver, gold’s degen friend.**
If you are looking for more beta and bigger spikes silver is probably more your play. Less bank buyers mean the floor is lower, and runs on a similar cycle as gold. It also has bigger whipsaws, so if you want a fun ride call silver for a good time.