Last Saturday, during my monthly client Zoom meeting, I shared my view that the gold rally had gone parabolic — and reminded everyone that it looked eerily similar to 2011, when gold peaked at US $1,900 before crashing for almost a decade.
In less than a week, the headlines say it all: Gold Plunges From Record High With Biggest One-Day Decline in 12 Years. This is after the Gold reached a record high of almost US$4,400 per ounce, with around 10% drop in 2 days.
In my recent articles, Bitcoin Correction and the Trump Tariff Explained, I’ve highlighted how markets have become increasingly driven by sentiment and political noise rather than fundamentals. Gold is no exception.
A Repeat of History
When both gold and stock prices go up together, it’s not a good sign. Something is very off. There are always consequences of chasing shiny trends.
When I see analysts forecasting the Gold price to reach US$5,000 per ounce, it feels like déjà vu all over again.
Back in 2020, I wrote Gold Price Surging: Is It Too Late to Buy Gold Now?, explaining why gold was starting to behave less like a safe haven and more like a speculative asset.
Fast forward to today, and the same psychology is at play — just at a higher price.
To understand this, we need to go back to 2011, when the gold hit its then-record high of US$1,900 per ounce, and the same excitement took over.
Analysts were bullish, investors rushed in — and then gold fell 40% and stayed depressed for nearly nine years.
I wrote about that period in my post Gold: Tops US$1,910 — Go above US$2,500 this year, where I described how investor euphoria often marks the top of the cycle.
The recent plunge in the past few days, resonates the biggest three-day slump in gold prices since October 2008 — proves that history doesn’t repeat itself exactly, but it certainly rhymes.
Below is the clip from my recent sharing session. If you’re an FRM Member, you can watch the full recording in your member portal.
In case you don’t know, I run a program called the FIRE Retirement Membership (FRM) — a private community where I share my latest market insights and investment strategies with members who want to take their retirement planning to the next level.
We have monthly live briefings to discuss global market trends, portfolio positioning, and the latest investment opportunities.
Click here to explore the benefits of FRM membership.
Your Key Takeaway
This week’s sell-off doesn’t surprise me. After a parabolic move, markets often experience a sharp correction — that’s simply how bubbles deflate.
But this isn’t a reason to panic, nor is it a call to buy the dip blindly. Gold still serves a purpose as a hedge, but at these levels, the risk–reward is not necessarily attractive.
Instead, take this as a timely reminder:
- Markets move in cycles, not straight lines.
- Diversification across asset classes remains the only free lunch in finance and the best defence against volatility.
- The smartest investors ride the trend when momentum is strong — and step aside when euphoria takes over.
In every cycle — whether it’s gold, crypto, or stocks — discipline beats emotion, and patience rewards those who stay focused on the long game.
If you found this analysis useful, share the article and stay connected.
Subscribe to my Retire Rich Weekly Newsletter for practical investment and retirement insights, and join my Telegram community for real-time market updates and discussions.
Stay invested — and stay smart.