Why is Gold Crashing Today During a War

Gold is crashing right now and the mainstream media scary lights the mainstream media is in an absolute frenzy telling retail investors that the historic precious metal rally is officially dead but is it look i'm not going to tease you with with the answers i'm just going to tell you exactly what's going on right now and then you can decide if you want to stick around for the next five minutes to hear my thoughts on it so first wall street's systematic trading algorithms are automatically liquidating billions in paper gold contracts because a massive massive spike in oil prices just terrified the bond market second the cynical observer would say this is a deliberate liquidity flush designed to wipe out late to the party retail investors who piled in with massive leverage allegedly and third the actual physical demand for gold from commercial and central banks hasn't dropped in fact it's up because vaults are emptying at record rates oh and a bonus for freezing after a rally as big as the one we've had over the last year a pullback is normal anyway my name's nick i've been a professional investor non-professional trader for 24 years before i start i'm not a financial advisor and this is not an inducement to buy or sell any assets and most importantly do not take financial advice from some random on youtube especially one wearing a shirt that says bloody allegedly on it i mean anyway let's figure this out together right now the media is saying that go that the gold run is over right they point out that ppi came out it came out at 3.4 percent for february just you know like an hour or so ago which was way hotter than expected and they claim that because inflation is being sticky the federal reserve is going to be forced to hold interest rates higher for much longer than anyone thought and when the interest rates stay high the u.s dollar index spikes back to over like a hundred right which supposedly makes non-yielding assets like gold completely worthless and if you don't know what the dollar index is it's the value of the u.s dollar right it's the strength of the u.s dollar they want you to believe that the macroeconomic environment has fundamentally shifted and that you need to sell your gold immediately before it drops even further allegedly that's what they want you to believe the cynical observer would argue that this is complete nonsense over the short term sure the paper price is dropping but structurally it could be a massive lie but but here's the catch the media the media always forgets to mention stuff like this heading into 2026 gold was universally recognized as one of the most crowded trades on the entire planet after gold shot up over 60 last year a massive wave of retail euphoria euphoria flooded the market inexperienced investors piled into highly leveraged exchange exchange traded funds etfs essentially renting gold for for quick momentum right they weren't actually buying gold they were renting gold trying to make money from it and wall street loves it when retail users leverage because it sets up a perfect trap for them so let's talk about why why we had this violent crash today and what is happening right now so when the conflict in iran escalated and the strait of hormuz effectively shut down crude oil spying past a hundred dollars a barrel that energy shock terrified the bond market pushing the 10-year yield up to to almost i think it was 1.8 percent if i remember but i'm doing that from memory and the second those yields ticked up the commodity trading advisors the massive systematic rather hedge funds that control the market triggered their preset stop losses now i'm going to explain what a what a systematic hedge fund is it's a hedge fund that just follows a system an algorithm right they don't have real traders making real decisions it's just based on an algo and it's very predictable because they just do what the algo says anyway these funds operate on algorithms that don't care about geopolitical safety or physical supply so when their momentum models break they automatically dump tens of thousands of people gold contracts onto the market in a matter of seconds the initial wave of mechanical selling knocks the price down through obvious support levels which then triggers all the margin calls for those leverage retail investors this isn't just happening to gold by the way to a lesser extent it happened to stocks today and we've seen billions and billions and billions over the last few weeks of systematic hedge funds say uh selling stocks right and this creates a devastating self-fulfilling spiral of liquidations they are dumping paper trash to drive the spot price into the ground while they scoop up the underlying assets for cheap allegedly this exact same setup happens every single time we hit a period of stagflationary panic look at what happened during the 2008 financial crisis gold suffered like a massive 30 35 something like that correction as institutions desperately liquidated their paper assets to raise cash to cover their other bad debts they flushed the shook out the weak hands and then gold went to hit record highs for like over three years right the underlying mechanism today is exactly the same while paper market is experiencing a violent reset the physical market is telling a completely different story central banks bought 863 tons of actual physical gold last year and i know that doesn't matter this year but this year they're projected to buy another 800 tons and that's unlikely to change and some are also saying a hundred sorry a thousand times rather so countries like china poland and uzbekistan aggressively hoarding real gold to protect themselves from a u.s national debt crisis with the 40 trillion in debt that they're almost at so they are perfectly happy to let western institutions suppress the paper price because it just allows them to buy physical metal at a discount and if you want proof that this disconnect is real just look at comex registered vaults right now registered gold is the actual physical metal that has that people who hold futures contracts on comex it's the actual physical metal that they can claim for themselves right last april those registries those registered inventories were sitting at a record peak of 24.25 million ounces today that number has plunged to roughly 16.7 million ounces it is it is dumping at an unprecedented rate this is a 31 collapse in the deliverable physical supply in less than a year so they buy cheap paper contracts demand physical delivery through the exchange and quietly remove the metal from the western banking system entirely that's what's happening right now and it's similar to what was happening with silver also so when the registered vaults run low the risk of failure to deliver skyrockets if a geopolitical shock trick is a massive run on the exchange and everyone demands their metal at once then comex won't have registered inventories to satisfy those claims this is just going to force cash settlement and they're effectively paying you out and depreciating dollars while they keep hold of the hard assets it's it's a wealth extraction machine allegedly the truth is this isn't a verdict on gold as a long-term hedge what's happening today it's it's a violent mechanical reset of an overcrowded leverage trade meeting a wall of profit taking so what does this mean for us look my plan is exactly the same as it's always been i don't care about these short-term moves up or down up or down it doesn't really matter to me i'm sitting on my hands through all this volatility i said at the start of this war i'm sitting on my hands and i'm not taking many actions right i'm avoiding wall street leverage traps entirely and i just stick to physical hard assets that i can actually hold in my hands and who cares if price goes up or down up or down a little bit as long as i'm not in leverage trades i don't really care anyway that's my opinion that's what i think's happening with gold i'll see you on the next one