Gold is falling, and a bunch of people are now saying gold's all-time high is 5600, but it's really just emotional chatter. After all, on X I saw people calling it bearish starting at 3500, getting wishy-washy at 4000, and saying it was a historic top at 5000.

Gold has always been viewed as a safe-haven asset, but with this Iran conflict, gold's performance has proven to be anything but a hedge. The issue comes down to liquidity. Gold currently has the most abundant liquidity among major asset classes. As war expectations materialize, markets are spontaneously dumping the most liquid assets available—this is already a pattern. For example, after the Russia-Ukraine war broke out, gold pulled back 5% from its highs, driven by speculative funds taking profits and crude oil surging, which pushed up inflation expectations. This Iran war is no exception. Even as of now, gold is up 10% year-to-date cumulatively, ranking near the top among major asset classes, and there's plenty of momentum for profit-taking.

How should we view gold going forward? Let's set aside the macroeconomic fundamentals—central bank gold purchases, inflation-resistant assets as prices rise, accelerating de-dollarization, and so on—because these fundamental catalysts are more long-term in nature.

The key is to look at some near-term signals in gold. After oil broke through $100, in a stagflation scenario, gold's performance has vastly outperformed other major asset classes.

The CFTC net long positioning is no longer crowded, gold price volatility has retreated from highs and is gradually returning to a healthier zone. This is the comfort zone for institutional positioning and building. Buying into low volatility is institutional consensus...

Currently, gold's trading logic centers on high oil prices pushing up inflation and the Fed rate hike narrative. I believe the Fed won't raise rates in 2026. If the US doesn't want to see a triple kill in stocks, bonds, and the dollar, at most they'll just pause rate cuts.

Given the sluggish growth in the US economy, the Fed will tolerate elevated inflation longer than the market expects. Fiscal monetization is almost unavoidable—they'll keep printing money at full capacity.

When the war ends and rate cuts return to the fore, when stagflation starts being traded by markets, gold will launch another rally.

Furthermore, the truth that maintains world order is violence, but the Iran war has exposed some illusions about the US. The dollar system is becoming increasingly fragile. Trump has accelerated gold's gains—this president is gold's biggest bull...

Gold breaking below moving averages isn't a bearish opportunity; it's a great time to gradually establish long positions.