The precious metals market has been wilder than crypto these past two days. $XAU/USD(XAUUSD.FOREX)$ saw a nearly $500 intraday swing on Thursday, crashing from a record high of $5,596 to $5,105, then somehow bouncing back $300. At one point, minute-by-minute moves exceeded $100.
$XAG/USD(XAGUSD.FOREX)$ joined the chaos too, with an intraday drop of over $10 at its worst.
Today, gold is down another 6%, breaking key support levels and plunging back toward $5,000 in a flash.
CME has already raised margin requirements, and the warning light is flashing: liquidity is drying up.
Kevin Warsh is Coming! Stronger USD = Weaker Gold
Trump announces his pick for the next Fed Chair - Kevin Warsh.
So why is the market so scared?
Warsh is widely known as a hardline hawk. He has openly criticized the current Fed for mishandling inflation and has pushed back against QE (quantitative easing). Rate-cut expectations could evaporate, and the liquidity tide could retreat fast.
⚠️ Cathie Wood: “The Bubble Isn’t AI — It’s Gold.”
ARK Invest’s Cathie Wood just issued a warning: Gold-to-M2 ratio is at its highest level since the Great Depression (1934).
In her view, this parabolic move may be near the end of its cycle — and if the dollar regains strength, it could pop the gold bubble.
Her shock call: Gold could drop as much as 60% in a full unwind.
UBS Still Bullish… But Catching the Knife Looks Dangerous
UBS still sees gold reaching $6,200 this year — but with liquidity drying up and the risk of a hawkish Fed Chair looming, the short-term risk of “catching a falling knife” is extremely high.
💬 Community question
In this wave, are you holding the long or hitting the short?
✅ Bulls: “UBS is right — this is just a technical pullback. $6,200 is still the target.”
❌ Bears: “Cathie called it — Warsh = the end of gold. The bubble is about to burst.”
Can gold defend the $5,000 level? Or is the real flush only getting started?
Leave your comments to win tiger coins~
Comments
The Kevin Warsh factor matters here. A hawkish Fed Chair candidate immediately reprices the entire rate and USD path, and gold is extremely sensitive to that shift. I don’t fully buy a 60% crash scenario, but I do agree with Cathie Wood on one thing: this rally went parabolic, and parabolic moves don’t correct gently.
For now, I’m not rushing to catch the knife. The $5,000 level is critical — if it stabilizes with volume and volatility cools, that’s a different conversation. Until then, I’m staying patient, respecting the downside risk, and letting the market show its hand before committing long again.
@Tiger_comments @TigerStars @TigerClub
Can gold defend the $5,000 level? Or is the real flush only getting started?
Leave your comments to win tiger coins~
If gold closes the week above $5,000, the "buy on dips" narrative likely remains intact with an eye toward $5,300.
If it fails, the correction could expand significantly as late buyers are forced out of their positions.
which way would it swing [Thinking] [Thinking] [Thinking] [Doubt] [Doubt] [Doubt] [Helpless] [Helpless] [Helpless]
Bull: Buy the dip. Central banks are buying Gold to diversify away from the dollar. Global tensions especially in Iran means Gold is a safe haven asset to buy and hold in tumultuous times.
Bear: Gold is a bubble. A Warsh led Fed will fight inflation with a stronger dollar & possibly lower interest rates. When the US dollar strengthens , Gold as an unyielding asset looks less attractive.
The Verdict: The current emotive market reaction is certainly bearish. Whether you should hold Gold or sell is a multi million dollar question.
The smart money is waiting for the dust to settle, watching if Warsh's historic hawkishness outweighs his recent dovish comments on interest rates.
In this volatile market, the only thing more volatile than Gold might be Trump's next word.
@Tiger_comments @TigerStars @Tiger_SG @TigerClub
So, it can swing either way depending on how policies pan out.
Based on the latest inflation data and strong labour market, rate cuts seem unlikely for now. As long as rate cuts remain steady, I believe the bubble for gold will pop. Of course, it is important for the uncertainties to remain steady or reduced as gold has always been as a safe haven in such times.
The next few months will reveal what is going to happen to gold. I don’t think in the short term gold will be able to defend the $5000 level as many would be rushing to cash out to secure their profits. It is always better to make less than not make anything. One can always buy back later if one wants it in their portfolio but I do think gold will slip back close to historical levels.