The GLD ETF dropped 25% from its February peak. Traders now expect two more years of losses. Nobody asked what these traders were doing in February when gold hit that intraday record. Buying, presumably. At the top. Like they always do.
Gold was supposed to be the safe haven. The inflation hedge. The thing you buy when central banks go insane and currencies collapse and society crumbles into Mad Max but with better production values. Turns out it's just another ticker that goes down when people sell it. Revolutionary stuff.
The precious metal keeps falling. The selling keeps getting worse. These are the same sentence but financial journalists get paid by the word so here we are. Gold bugs spent decades mocking stock investors for believing in pieces of paper backed by nothing. Now they're watching their shiny rocks get obliterated while the S&P keeps grinding higher. The irony would be delicious if anyone involved had the self-awareness to taste it.
Two more years of pain. That's the bet. Some trader looked at a chart, drew some lines, divided his IQ by his account balance, and landed on 24 months. Could be 18 months. Could be 36. Could be forever. The chart doesn't know and neither does he. But two years sounds specific enough to get quoted in an article, so two years it is.
February marked the intraday record. Intraday. Meaning it hit that price for maybe an hour before cratering. Somewhere out there is a guy who bought at that exact high. He's held through a 25% drawdown. He's reading articles about two more years of losses. He's telling himself it's a long-term hold. He's lying to himself. We know he's lying. He knows he's lying. The gold bar sitting in his closet next to his prepper rations knows he's lying.
The pain may last two more years, but the denial is forever.
Photo by Hennie Stander on Unsplash
Leave a Comment