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I’ve been getting flooded with emails lately. People are freaking out about gold, convinced it’s tanking or never coming back. Let me say this clearly: Stop worrying so much. We’re going to be fine.
Here’s what’s actually going on — and it’s not what the panic crowd thinks.
The Pattern That Keeps Repeating
I pulled up a 30-minute chart of gold, and the same thing keeps happening. Night after night, during European and Asian sessions, gold pushes higher. Then as soon as the U.S. gets going — usually around 7-8 a.m. ET the selling hits. It’s almost mechanical at this point.
The world loves gold. The U.S. hates it. At least U.S. traders do during those early morning hours. This pattern got a turbo-boost on Wednesday when the Federal Reserve opted for a “hawkish hold.”
By keeping rates steady at 3.50-3.75% and signaling only one cut for the rest of the year, they gave U.S. traders an excuse to dump paper gold in favor of the dollar. While New York was busy selling the news on Wednesday, physical demand in Asia is already lining up to buy that dip before the market opens on Friday.
Wednesday was no different. Gold rallied overnight, and the moment the U.S. opened, the dumping began again. This has been the rhythm for weeks — two completely different attitudes toward gold depending on which side of the world you’re looking at.
Some of this looks like profit-taking. If gold runs up overnight, traders use that strength to sell into it. Maybe it’s algorithms, maybe it’s traders trying to squeeze out every dollar. But none of this changes the bigger picture.
Why I’m Not Worried
People keep telling me gold is getting sideswiped or flushed out. No, it’s not. I’m watching the tape closely because, as of Wednesday afternoon, gold actually dipped below $5,000 to test support near $4,700. To the retail crowd, that looks like a collapse. To me, it looks like a classic liquidity sweep.
We’re still up significantly on the year, and if we hold this $4,700 floor through Friday’s close, the spring-load for the next leg up to $6,000 will be set.
The U.S. Dollar Index (DXY) has been fading. It was above par on Friday, and now it’s down at 99.44. The dollar drops, rates drop, yet gold barely budges. That tells you the selling pressure isn’t fundamental — it’s timing-based.
And we can’t ignore the geopolitical backdrop. Control over strategic chokepoints like the Strait of Hormuz always plays into global risk dynamics.
Geopolitics is the real driver here. Shipping data this week showed traffic through Hormuz has slowed sharply — roughly 70-75% below normal levels — while war-risk insurance premiums have surged, making gold look less like a trade and more like insurance.
When tensions rise in areas that matter for energy flow and trade routes, money looks for safety. Gold tends to benefit from that — even if the reaction isn’t instant. If those tensions escalate by Friday, the morning sell programs in the U.S. are going to find themselves on the wrong side of a very violent short squeeze.
The Institutional Signal
Don’t let the 7:00 a.m. volatility fool you. Earlier this quarter, Jane Street, who is one of the world’s largest and most influential quantitative proprietary trading firms, disclosed a 20.7 million-share stake in iShares Silver Trust (SLV).
The biggest quant firms on the planet don’t take positions like that for a quick flip. They see the same macro writing on the wall that I do.
The U.S. morning session might try to shake you out, but the big money is staying put for the long haul.
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Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Don’t Let The Recent Gold Dip Fool You!
I’m the guy who predicted the current Gold Supercycle in 2023,
A third mega catalyst is about to trigger, which could make gold’s recent 150% run look like a drop in the bucket.
I will reveal my No. 1 trade to take advantage of the imminent run, the same one that delivered a perfect win rate last year.
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Disclaimer: We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. Since 12/05/2024, the trading approach discussed today has published 54 trade alerts. All 54 have returned as winning trades, for a 100% win rate. The average return per trade, winners and losers combined, has been 16.88% on an average holding period of 9 days.
