Gold bugs go full throttle as fiat fatigue hits fever pitch

Gold just punched through $3,500 like it owed it money — and this isn’t some kneejerk move off Trump barking at Powell. That’s sideshow fluff. The real driver here is the slow-motion trainwreck of fiat credibility. We’re staring down a synchronized global easing cycle with rate cuts queued up like Sunday night IMM orders. With the exception of the BoJ — still clinging to a hiking bias — there’s not a central bank out there that won’t be reaching for the rate cut lever in the next few months. Gold isn’t reacting. It’s front-running the whole damn parade.

This is about more than Trump vs Powell. It’s about every corner of fiscal and monetary policy flashing one big red warning: confidence erosion. Gold’s reading the room and pricing a world where real rates are either terminally negative or too volatile to anchor anything. When you can’t trust the nominal, you run for something physical, and gold still holds that psychological bid as the final hedge against policy chaos.

What’s different this time is how real this move is. Inflation-adjusted, gold has now obliterated the 1980 peak — the one set during peak stagflation and geopolitical chaos. That’s not just a technical breakout — that’s a generational shift in trust. And if you chart the S&P 500 in gold terms? Welcome back to the Covid crash lows. Greed vs. fear? Fear’s driving, and it’s not asking for directions.

Look under the hood and you’ll see the ETF story’s got plenty of juice left. The value of assets in State Street’s gold fund is at an all-time high, sure — but that’s just price. Shares outstanding — your best proxy for retail positioning — are still way below the Covid shelter-in-place panic levels. Translation? Retail’s not in yet. And when U.S. investors start to notice their 60/40 portfolios bleeding on both sides, they’re going to start reaching for the only thing left that doesn’t have a liability attached.

And let’s not forget bonds — the market that always tells the truth, eventually. Front-end yields are sliding like you’d expect in a slowdown. But long-end yields rising in the face of that? That’s the tell. It’s not just a recession fear — it’s a confidence fracture. When people dump Treasuries in a slowdown, that’s a full-blown system risk signal. The Fed already tried a 50bps emergency cut last September. All it did was steepen the curve and turbocharge gold.

Here’s the kicker: we’re not even in the currency response phase yet. But if this dollar meltdown keeps going, you can bet the ECB and BoJ won’t just sit on their hands. A runaway euro or yen is an export economy death sentence. Once they blink — think dovish pivots, QE reboots, or even capital controls chatter — the global liquidity floodgates open. Again.

So yeah — Goldman calling $4,000 gold by mid-next year doesn’t feel like a stretch. If anything, it might be conservative. Because this isn’t about one man in a suit. It’s about the system bending under its own contradictions.

Bottom line? This isn’t a bull run. It’s a flight. The fiat regime is leaking credibility, and gold is the only asset with no counterparty risk and no policy baggage. Until that changes — and it won’t anytime soon — gold bugs aren’t bugs. They’re early.